When to Claim Social Security - Part 1

When to Claim Social Security - Part 1

As individuals begin to transition into retirement years, a common question is when should they begin to take their Social Security benefits? In a 2007 study, the Center for Retirement Research at Boston College found most married couples elected to receive their Social Security benefits at age 62. Researchers found that by educating these individuals on the options available to them, most would have opted to take their benefits at age 66, the Full Retirement Age (FRA).

Retirees who begin receiving benefits early collect approximately 36 percent less than if they had waited until Full Retirement Age.

If married, the lower income-earning spouse will receive 35 percent of the primary worker’s benefit. However, if the higher income-earner had waited until age 66 to begin receiving benefits the spousal benefit would have been 50 percent. When the first spouse dies, the surviving spouse is entitled to the greater of their current benefit or 100 percent of the decedent’s benefit.

A popular strategy that many couples are implementing is to have the lower income-earning spouse claim Social Security benefits at age 62 and while the higher income-earning spouse wait until age 70. If the lower income spouse survives their spouse, the surviving spouse would receive 100 percent of the deceased’s Social Security benefit. If the primary earner waits until age 70 to claim benefits their surviving spouse’s Social Security benefits would go up by over 250 percent!

Factors to consider for electing to receive Social Security benefits: longevity, interest rates, need for income.

In Part 2, we'll look at the best times to claim your Social Security benefits.

Give us a call to discuss your Social Security strategy.

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