When Should I Collect Social Security?

Gerri Willis’ Top Tips column (wasn’t it Five Tips?) recently tackled the subject of when you should collect social security and what I gathered from her advice was that it depends. You can start collecting social security when you hit the age of 62 and you must start collecting it when you hit full retirement age at 67, so how do you pick when you start?

First, calculate how much you can get with their social security calculator.

Here are the factors she lists:
1. Guaranteed Income – The idea of guaranteed income is tricky in and of itself, though she doesn’t go into it, because there isn’t much in life that’s guaranteed. I’ve discussed the dangers of fixed annuities in the past (they can get destroyed by inflation) and those issues affect all other “guaranteed” type securities.
2. Lifespan – Considering how long or how short you are likely to live, you might want to adjust when you start taking social security payments.

Lastly, she recommends you talk to experts (always a good idea!):

The Social Security Administration recommends that people talk to one its representatives at least a year before they plan to sign up for benefits. They’ll take a close look at your particular situation, and give you advice based on what they see. You can call them toll free at 1-800-772-1213, or pay a visit to your local Social Security office.

Source: CNN Money.






5 responses to “When Should I Collect Social Security?”

  1. Working with social security will reduce your benefit if:
    1) you are under full retirement age, and
    2) your earnings from working exceeds tha annual limit set by Social Security. For 2006, that limit is $12,480.

    The month you reach full retirement you get your full social security benefits with no limits on earnings.

    Source: http://www.ssa.gov/retire2/whileworking.htm

  2. […] When Should I Collect Social Security? at My Retirement Blog A good question to ask when your planning your retirement. (What’s up with the colors on this site?) […]

  3. Mike

    Gerri got it wrong, and you got it “wronger”.

    Your error: you aren’t required to take Social Security at your Normal Retirement Age (which may be 67 for younger people but is 66 or less for people currently approaching retirement) but may you may delay taking Social Security until the age of 70.

    Gerri’s error: your montly payment doesn’t stop increasing for delaying retirement at your Normal Retirement Age (NRA), but continues to increase as you delay retirement up to the age of 70.

    And there are other considerations. As Bill mentioned, wage income received before attaining your NRA can reduce your benefit. Also, a married couple has other considerations.

    Recommend researching the issue thoroughly at http://www.ssa.gov before deciding.

  4. John M

    if one has a medical condition that he or she cannot any longer perform their career job duties what are their options approx age 54

  5. J. Michael Steele

    If you defer taking after your NRA, you increase your subsequent benefits by about 8%. This is a lot like taking the benefits and investing in an indexed (!) joint life annuity with a government guarantee. When you shop this investment in the annuity market, you are likely to find that it is very attractive even up to age 70.

    Fine points: (1) There is a tax advantage to not receiving the benefits but “investing them” by deferral. (2) There are spousal benefits if you spouse stays off the benefit to NRA (3) SS is judgment proof (not that you care), (3) if you are “rated down” i.e. not healthy, things are tricky…