The drama surrounding social security, and its potential insolvency, has been more evident in recent years. As lawmakers try to find ways to keep the program alive for so many retired Americans. Some cuts might be on the table in the future, and in staring down the barrel of those cuts, some Americans are wondering when the best time to begin claiming social security might be.
You can begin claiming early retirement at age 62. Full retirement age for people born after 1960 is age 67. You can also begin claiming them at age 70. But people have begun wondering if it is beneficial to pull social security early or just wait until they are 70.
KTRH money man Pat Shinn says there is no one size fits all answer, as the situation varies for everyone. However, drawing sooner can be a good thing. Not only are you getting more payments, but you are also securing income in the event you want to retire.
"If you retire, and you delay taking social security...where is your income going to come from? If it is from a pre-tax retirement account...you might be better off taking social security earlier," he says.
Full retirement age is one of the key cogs in the entire deal. As mentioned, for anyone born after 1960, the full retirement age is 67. You can pull beginning at 62. However, the monthly check is about 30% smaller if you claim at 62 years old instead of 67. Additionally, the monthly benefit increases by 8% each year after age 67 until you reach 70.
Sure, you get more payments from social security in the long run, albeit for a bit less. But there is a fine line to walk.
"If you intend on collecting social security before your full retirement age, you are going to pay a huge penalty," Shinn says.
Shinn adds there are plenty of calculators to better determine what age is right for you. You can find them on the social security website.
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