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Beginning Benefits

Richard Quinn, 2:06 am ET

IT’S A QUESTION that gets asked all the time: What’s the best age to start Social Security benefits?

The discussion quickly deteriorates into calculating the breakeven point. Are you better off with a lower benefit for a longer period or a larger benefit for a shorter time—that is, assuming you live to your actuarial life expectancy? What if you die before you reach breakeven? Yeah, what if? You won’t be around to complete the final calculation.

Some folks want to maximize their total benefits received over their lifetime. But who cares? Social Security is insurance. There’s no guaranteed relationship between the taxes you paid and the total benefits you collect. If you really want to beat the system, get married 11 years before you retire, get divorced 10 years later and, a year before you start your benefits, remarry. Voila, three people will collect benefits based on the earnings of one person.

Fear not, chances are you’ll get back all that you “invested” in Social Security and a good deal more. I certainly have.

The real goal, I’d argue, is to maximize the monthly benefit when you need the income the most. For some people, that will mean starting at age 62. But for others—perhaps the more fortunate—starting benefits at age 70 helps assure a higher income in later years. The most popular age to claim benefits is still 62, but the average starting age has been gradually rising. Whatever you do, don’t start your benefits because you believe Social Security won’t be around later. It isn’t going away.

For couples, when one spouse begins collecting benefits may impact the other spouse’s benefits. Because of the earnings offset, one thing you may not want to do is begin Social Security if you’re still working and you’re younger than your full Social Security retirement age. You can earn a certain amount while avoiding a reduction in benefits, but it’s best to check the rules before you claim.

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corrupt
corrupt
6 days ago

It might also be good to compare your break even date with the projected date the trust fund runs out of $$. If I collect now and benefits are reduced later, the break even point will be extended a few years.

IAD
IAD
5 days ago
Reply to  corrupt

There is a zero chance benefits will be cut. This is political suicide. More than likely, the benefits will be reduced in other ways such as higher taxes, the entire SS benefit being taxed, etc.

R Quinn
R Quinn
6 days ago
Reply to  corrupt

Zero chance politicians will let benefits be cut.

CJ
CJ
6 days ago

“If you really want to beat the system, get married 11 years before you retire, get divorced 10 years later and, a year before you start your benefits, remarry. Voila, three people will collect benefits based on the earnings of one person.”

Too funny. Don’t put it past a few people to try this if it’ll yield a few more bucks per month. lol

Ginger Williams
Ginger Williams
6 days ago

Agree, the best age to start collecting depends on your circumstances. A friend’s husband recently started collecting at 62, with plans for my friend to wait until 67. He was able to stop working at a physically demanding full-time job, shifting to a much less demanding part-time job where he’ll make just under the earnings limit. She works in an office setting, without the physical demands. He’s doing a larger share of household chores, since he works fewer hours, giving them a bit more free time together. They decided to trade the higher financial payoff from waiting for the lifestyle and health benefits of reduced physical labor.

I’m planning to retire from my current job at 62, but wait until 70 to collect social security. I’m getting tired of management and will have a pension to cover living expenses. I hope to work part-time in early retirement, supplementing my pension while having free time for hobbies, but have retirement savings if needed. I can afford to wait and let my social security benefit increase.

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