3 Signs You’ll Regret Claiming Social Security Early — and 3 Signs You Won’t
Written by
Caitlyn Moorhead
Edited by
Sean Fisher
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Claiming Social Security early sounds ideal if you are ready to retire before the age of 65, but you may not be seeing the whole financial picture of early retirement. Whether you want to start getting benefits at age 62, wait until your full retirement age, or hold out for the maximum amount by claiming at age 70, the Social Security Administration (SSA) can be tricky to navigate.
Deciding when to start claiming your full retirement benefits is a major retirement decision. Claiming early can lead to reduced monthly checks, but waiting isn’t always the best strategy for everyone. Here are three signs you might regret claiming benefits early and three signs you won’t.
3 Signs You Will Regret Claiming Early
Your Social Security retirement benefits can be affected by everything from your year of birth to the yearly cost of living adjustments (COLA). When calculating how the amount of your monthly benefits will be able to battle your bills, it’s important to factor in just how much you want to get out of your Social Security check.
You Have Your Health
If you’re in good health and have longevity in your family, you may be able to hold off on claiming. Claiming early could mean significantly less money over your lifetime, which, if you’re lucky, can be long, so you might want to stretch out your retirement income.
However, should something happen to you, the survivor benefit is based on the amount you receive, so claiming early will reduce the survivor benefit for your spouse.
You Haven’t Reached Full Retirement Age
Though you may think it’s 65, technically the new full retirement age is 67. Claiming before your full retirement age (which varies based on your birth year) results in a permanent reduction of your benefit amount.
If your significant other is relying on spousal benefits, they could also be higher if you wait, especially if they will rely on your work record for their benefits.
You Don’t Need the Money
If you have other income sources and don’t need Social Security to meet your daily expenses, waiting to claim can increase your future benefits.
Nonetheless, if you continue working while receiving benefits before reaching full retirement age, your benefits may be temporarily reduced based on your earnings, so that’s something else to consider.
3 Signs You Won’t Regret Claiming Early
Making the decision to claim Social Security benefits early requires careful consideration of your personal health, financial situation, primary insurance amount and retirement goals. It’s often wise to consult with a financial advisor to understand how your decision fits into your overall retirement plan.
Still, if you feel like claiming early might be the right decision for you, here are a few key signs to support that.
You Need the Income
If you need the money to cover living expenses and have no other income sources, claiming early can be a necessity. Though this is not necessarily ideal, it is there for a reason as a resource you can use.
You also just may want to enjoy your retirement while you’re still young enough to travel and more. If you want to ensure you enjoy your benefits while you’re still active and healthy, claiming early makes sense.
You Have Health Concerns
Having health issues or a family history of shorter lifespans means claiming early can be beneficial to make the most of your benefits. This also means that if you’re out of work or earning significantly less than before, early benefits can help stabilize your financial situation and healthcare costs.
You Have Other Retirement Savings Options
If you have substantial savings or other income sources, the reduced benefit might not impact your overall financial security. You may just want to have it for pocket money while living your well-deserved life of leisure.
Also, if you can afford to invest your Social Security benefits and potentially earn a higher return, claiming early could work to your advantage.
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