Do you really have to take your Social Security early? Below is an article from the New York Time that talks about some people being forced to take Social Security early.
There are definitely a lot of instances where Americans are forced to take Social Security early…emergencies, tragedies, personal crises, etc. However, many people who feel pinched by cash flow, but are NOT in a crises, still opt to start benefits early.
BEWARE – taking Social Security suboptimally can cost you a lot of money. I published research in the Journal of Financial Planning a month ago that showed how someone with $200,000 of savings could make their money last over 10 years longer by delaying Social Security. It’s even more for married couples. Yes, this means it is better to draw down your savings to claim Social Security later.
What’s the take away? – 1) If you have an emergency and don’t have any options, you may need to take Social Security early. But, if it is not an emergency, don’t start early! 2) Run your numbers. Make sure you understand the trade-off of starting Social Security early. Once you have your personal evaluation, you can make a good decision. Spending money to have an expert help you with this decision is well worth the thousands of dollars that are on the table.
Finally, for those that are really in a pinch, think about “Goldilocks.” Maybe you will need to start early, but even small adjustments can make a big different. Our software and advisors that use our software can come up with strategies that are “a compromise.” Again, run your numbers to see different incomes and the total benefits you can receive out of the system.
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