If you are like most federal employees, Social Security is a BIG part of your retirement and deciding when to start it is a big deal.
But there is one big Social Security paradox that is running rampant across the internet.
Nearly every article you read about when to start benefits advises that you should delay benefits as long as possible yet age 62 is still the most popular age to take benefits.
So, who is right? The “experts”? Or the masses?
Neither.
When You Should Start Social Security as a Federal Employee
In my opinion, delaying Social Security as long as possible is over-advised and taking benefits right away is done too often as well.
There is simply no cookie cutter answer for everyone.
Everyone’s situation calls for a slightly different approach in efforts to not only get the most money from the system over time but to ensure they and their spouse will have a comfortable retirement for the rest of their lives.
And just to give a taste for what the difference could be for you by taking benefits at 62 (the earliest you can take it) or at 70 (the latest you get increases for delaying) here is a snippet from a sample Social Security statement.
As you can see, waiting until 70 nearly doubles your age 62 benefits!
Again, this doesn’t mean everyone should wait until 70 but it is important to know what you would get at different ages.
Go to SSA.gov to make an account (if you haven’t already) to be able to get your own Social Security statement.
Good Reasons to Take Social Security Right Away
You Need the Income
Some people retire and simply need the income. Obviously, in an ideal situation you’d have the financial resources to delay benefits and get the increased amounts. However, in some cases, this is simply not in the cards and starting benefits early is simply the best solution.
One situation that many people find themselves in is when they are forced to retire before they had planned too. This could have been caused by a disability or a family situation. In these cases, some people will be forced to retire with less pension income than expected and will rely more heavily on their Social Security benefits.
You are Single and Have Health Issues
When someone is married, their Social Security decisions directly affect what their spouse can receive while both spouses are alive, and almost more importantly, what benefits the surviving spouse will be left with when one of them passes away. This is why it can often make sense for an ill spouse to delay benefits even if it doesn’t make sense for his own life expectancy.
If someone is single, the situation is a little simpler. A single person doesn’t have to worry about a spouse’s benefit so they are simply trying to maximize their own benefit. So if a single person has health issues that are likely to lead to a shortened life expectancy, it may make sense to start benefits early.
Your Spouse Is Older Than You and Has Lower Benefits
Whenever the older spouse has a lower earning record and they could receive more from spousal benefits from the higher-earning spouse’s records, it may make sense for the higher-earner to start benefits early. This would allow the older lower-earner to start drawing spousal benefits based on their work record.
You will want to run the numbers for your situation but this strategy can lead to a higher amount of cumulative benefits than delaying.
You Have Minor or Disabled Children at Home
When you have minor or disabled children at home, your spouse and your children may be eligible for Social Security benefits. But for them to receive benefits based on your record, you will have to have filed already. This may be a reason for you to file early because the total benefit paid to you, your spouse, and your children is often much more than your Full Retirement Age benefit.
Again, you will want to run the numbers on your situation to make sure this makes sense for you.
Dumb Reasons to Take Social Security Right Away
Delaying Social Security is a Government Ploy
Some people are thoroughly convinced that every day that they wait to file after their 62nd birthday they are simply playing into the government’s conspiracy to pay out as few benefits as possible.
For those that are familiar with the history of Social Security, you will know that this simply isn’t the case. The program was first signed into law in 1935 but it wasn’t until 1961 that the law was changed to allow both men and women to file early at age 62. And when this change was made, it was very clear that this adjustment was to assist older Americans who struggled to find work in their early sixties.
I Am Going To Die Early
Now, this argument has a few sides to it and some of which are valid reasons to draw early. For example, if you are single and you already have an illness that will most likely shorten your life expectancy then it probably makes sense to draw early.
That being said, many people use this argument before they have an illness or before they consider the ramifications on their spouse and family.
During the last century, life expectancies have grown dramatically. It is my opinion that this will only continue. Right now, the average 65 year old male will live until 84 and the average 65 year old female will live to age 86.
Now, for those that are married and believe that they should draw early, please consider the next point. Survivors benefits, or the benefits that your spouse will be left with once you pass, is often directly proportional to your benefit. This means that the longer you wait to file while you are alive, the higher the chances that your spouse will be taken care of when you pass.
So ironically, if you do believe that you will die early, one of the best ways to take care of your spouse is by delaying benefits, not taking them early.
You can learn more about strategies for couples here:
When Both Spouses Shouldn’t Delay Social Security
Wait and See Strategy
But because life is complicated, even with all the facts it can still be unclear on how long one should delay Social Security.
In these circumstances, once can often take a wait and see approach.
Normally this strategy is for those that know they don’t want to take benefits right at 62 but don’t know how long they’d like to delay.
In these cases it can make a lot of sense to not make a decision right away but to wait and see what retirement actually looks and feels like.
Other Common Questions
Should I File Social Security Early and Invest It?
Your Social Security Statement Can’t Be Trusted
Retiring Early? This Happens To Your Social Security
