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Social Security Benefits -- When Should I Claim Them?

June 13, 2016

Is there a right time to start claiming Social Security?

There are many factors to consider when preparing for retirement. One of the biggest decisions you will have to make is deciding when to claim your social security benefits. Your individual situation will affect your future income needs, but it is important to understand how your benefits are calculated in order to factor that into your situation.

The first item that affects how much benefit you receive is your full retirement age. You can find out your full retirement age here. Your full retirement age does not mean that is when you have to take your benefits. It is just the age when the benefits you receive will not be reduced for taking it early. Although workers can opt to take it as early as 62, you could be forfeiting up to 30% of your monthly benefit. You are, however, receiving those benefits for additional years where you would otherwise not be receiving anything. On the other side of the coin, for every year you delay taking your benefit beyond your full retirement age, your monthly benefit will increase by a certain percentage depending on your date of birth. The benefit increase no longer applies once you reach age 70, even if you continue to delay taking it.

Increase for Delayed Retirement

Year of Birth Yearly Rate of Increase Monthly Rate of Increase
1933 - 1934 5.5% 11/24 of 1%
1935 - 1936 6.0% 1/2 of 1%
1937 - 1938 6.5% 13/24 of 1%
1939 - 1940 7.0% 7/12 of 1%
1941 - 1942 7.5% 5/8 of 1%
1943 or later 8.0% 2/3 of 1%

When is the best time to start taking your social security retirement benefits? Is it at 62, your full retirement date, age 70, or somewhere in between?  That depends on your situation. Some other personal factors to consider are your current financial circumstances, health and longevity, and marital status. Spouses are entitled to either the individual benefit they earned or a spousal benefit of up to half the other’s benefit amount. There are also various income and tax factors to consider as well. The Social Security Administration’s website is filled with information and is a good starting point.

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Written by: Jeff Motske, CFP®

Jeff Motske is a published author, an accomplished executive, radio personality. He is recognized among the top 1% of financial advisors in America. Jeff is one-of-a-kind in the financial services world
because he knows and lives what so few people really understand: financial success isn’t a destination, it’s a choice and a commitment, one decision at a time.

For more than 25 years, Jeff has worked with clients to help them to achieve financial independence, and to work through money issues.

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