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Beginning Benefits

Richard Quinn

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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