The fact is, everyone has their own individual timetable when it comes to drawing their retirement benefits. For example, you may have immediate income requirements or health concerns, making it financially necessary to take your benefits early - at a reduced rate. While other people you know may be holding off until they reach their full retirement age, taking advantage of the maximum benefit amount.
Pros and cons for both
There are pros and cons associated with taking retirement benefits early, as well as taking them later. If you decide to take an early retirement and start taking your benefits right away, you'll have less, but you'll receive them for a longer period of time. If you wait your benefits will increase, but you'll have them for a shorter time period.
Before making such an important and permanent decision, you should consider all of your options. Questions that you may want to ask yourself when it comes to deciding when to take your Social Security retirement benefits include:
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Are you healthy?
If you can't work, your health may dictate that you begin taking your benefits sooner rather than later. -
Do you want to continue to work at a job you love?
If you're between 62 and your full retirement age (67), you can continue to work while collecting your benefits early. However, there will be a limit as to how much you can earn to avoid a reduced benefit. Once you reach your full retirement age, you can continue to work as much as you like with no earning limit. -
Do you have health insurance?
If you quit working, will your health benefits go away with your paycheck? Unfortunately, many employers are doing away with retiree health benefits. Considering the fact that most people won't be eligible for Medicare until they turn age 65, you may need to consider working a little longer (and collecting your benefits later) to hold onto your health insurance. -
What is the longevity in your family history?
If your family history includes parents and grandparents living into their 80's, 90's and beyond, you may want to consider delaying your retirement benefits until later. (Of course, you'll also want to consider your own health.) By delaying your benefits beyond age 62, or even until you reach full retirement age, you'll have more money to live on for the remainder of your life. This can be a critical consideration especially if you think you may outlive your pension or retirement savings.
1. Social Security Administration: https://www.ssa.gov/pubs/EN-05-10077.pdf
