At What Age Should You Claim Your Social Security Benefits?

Many clients ask us when they should start receiving their Social Security benefits. Unfortunately, there is no set answer. The key is to make an informed decision. Although you can start receiving benefits at age 62, the amount you would receive will be considerably less than waiting until age 70.
The answer to when you should begin depends on several factors including whether:
• You can make ends meet without receiving benefits.
• Your health is good and you expect to exceed life expectancy.
• You are the lower-earning spouse and the higher earner can wait to full retirement to receive full benefits.
• You are an experienced investor and believe you will out-perform the increased benefits you would have received at full retirement by investing the lower benefits.
How Much You Will Lose by Receiving Benefits Early?
Should you choose to receive your Social Security up to 36 months prior to full retirement age, your full benefits will be permanently reduced by five-ninths of one percent per month for each month. If you start receiving benefits more that 36 months before your full benefit entitlement, your benefits will reduce by five-twelfths of one percent per month.
Tax Considerations
If you are not at full retirement age, receive Social Security benefits, and return to work, the amount you receive may be temporarily reduced. The reduction is currently one dollar for every two dollars earned for income over $18,240. During the year you reach full retirement age, the decrease is one dollar for every three dollars in income over $48,000 until the month you become fully eligible. The Social Security agency will credit your record when you reach full retirement age, which will result in higher benefits.
Spousal Benefits
Spouses, and in some cases, divorcees, are entitled to benefits. The highest spousal benefit you can receive is half the benefit your spouse is entitled to at full retirement age. Spouses are eligible at age 62 based on their spouse’s records. Like with claiming Social Security for oneself early, benefits reduce accordingly.
Feel free to contact us if you have questions. Our clients are welcome to receive unlimited complimentary Social Security advice.
Professional Tax Services is a locally owned provider serving over 3,500 local residents and businesses. For more information call 661-259-1967 or visit www.protaxservices.com. Through their complimentary EZ2 Thrive program, they provide unlimited free tax planning advice to their clients.