Why this is the right age to take Social Security

No matter when you decide to take benefits, Social Security is for the rest of your life

In today’s topsy-turvy world, millions of Americans are taking a closer look at their financial future and laying the groundwork for their golden years.

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Nearly every conversation surrounding retirement has a lot to do with when to begin collecting your Social Security benefits, and how to strategically maximize your payouts.

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Naturally, many factors are beyond our control such as job security, health, and other events that can completely alter our life trajectory. While everyone’s individual financial picture varies, we’re here to start the conversation and give you the knowledge you need to go down the right path.

Let’s start with the good news: no matter when you decide to take benefits, Social Security is for the rest of your life.

You read that right — once you draw benefits, you will continue to get them until you leave this world.

As morbid as it sounds, the length of time you expect to live is a large part of the “guesstimate” as to when the right time to take Social Security is for each person.

Moreover, once you begin drawing benefits, you’re likely “grandfathered in” and will keep your current level of benefits even if the government begins to cut benefits for future beneficiaries. This is an important point you should keep in mind, especially given the unprecedented budgetary challenges we’re seeing at the federal level.

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Politics aside, anyone with a basic grasp of numbers understands that cuts to benefits will eventually be inevitable.

So, younger folks who are far from retirement, we urge you to plan ahead. You should ensure that Social Security isn’t your only means to support yourself during retirement.

Instead, Social Security benefits should be enhancements to your savings. The hope is that you’re not entirely dependent on this government program.

Maximum benefits hover around $3,000 a month currently, which might sound like a lot of money, but don’t take into account the ever-surging costs of health care and housing.

For those of you getting close to retirement and who need a financial lifeline as soon as possible, the absolute earliest access you have to social security benefits is at 62 years old.

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Unfortunately, drawing at this age comes at a staggering cost. If you take an early payout, your income will be reduced by up to 30 percent permanently for the rest of your life. Unless you have serious financial worries or troubling health concerns, you might want to wait until full retirement age.

We encourage you to do some homework; have conversations with your loved ones and be excited about what’s to come. 

The next major milestone in the world of Social Security benefits is your full retirement age, which is between 66 and 67, depending on the month and the year of your birth.

Once you reach this age, you will receive 100 percent of your promised benefit. You can view what you can expect on the Social Security Administration’s website by signing up. Between 62 and your full retirement age, your benefit will grow every month.

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Finally, if you wait until you’re 70 years old, your benefit will continue growing just like it did between 62 and your full retirement age. You will find articles all over the internet recommending that you wait as long as possible.

We don’t disagree with the mathematical premise of these experts’ opinions, but we urge you to consider a few things before you wait.

As morbid as it sounds, the length of time you expect to live is a large part of the “guesstimate” as to when the right time to take Social Security is for each person.

As you might imagine, it’s really hard to look into the proverbial crystal ball and figure out when you’re going to leave this life. Sadly, many people who wait expecting more money might receive less in payouts because they don’t live long enough.

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Additionally, as we mentioned, government spending is out of control and cuts eventually will be on the table.

That’s why we believe the most reasonable and prudent option in today’s environment is taking your benefits at full retirement age. You’re not leaving money on the table, but you’re not waiting so long that you might not see the fruit of your labors.

As is the case with anything in financial planning, a little effort and foresight go a long way.

We encourage you to do some homework; have conversations with your loved ones and be excited about what’s to come.

After all, you should happily anticipate retirement as a new chapter. In fact, in many Spanish-speaking countries, the word for retirement is related to the English word jubilation. Plan ahead, and you’ll be able to reach your jubilation with relative ease.

Clara Del Villar is Director of Senior Initiatives & Retirement Readiness at FreedomWorks Foundation. Her financial industry career included senior roles in Investment Management, Private Asset Management. She currently serves as Board Director at General American Investors Co. and Executive Committee of Weill Cornell Women’s Health Symposium.

 David Grasso is the Executive Director of GenBiz, a non-profit dedicated to helping young Americans achieve financial freedom through entrepreneurship. David is also the host of "Bold Business" on Bold TV, an online television show that spotlights entrepreneurs and their entrepreneurial journey. 

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