I know plenty of people who decided they were tired of working and took Social Security as soon as they were eligible–age 62.
But is it the smartest decision?
No. It isn’t.
If you wait until your full retirement age, you’ll get up to 30 percent more than if you take Social Security when you first become eligible. That’s significant.
But consider this: If you can wait until age 70, you’ll get more than 75 percent more than if you took it at 62.
That’s no small thing.
Yes, you can find all sorts of calculators that purport to show it’s smarter in some circumstances to take the cash young and invest it.
But not so fast: If you wait, you are GUARANTEED the higher benefit. That’s a six to seven percent increase a year. No investment you make is going to guarantee that. In fact, you could lose it all. All investments are risky. Social security is not. (At least so far. Unless certain politicians get a hold of it.)
You also will get credit for inflation over those years you wait.
And are you really going to invest it?
That’s the question. Most people never do. They just spend it.
There’s another reason to wait:
If you’re married and the spouse with the bigger benefit waits to take their benefit until they are 70, the surviving spouse is guaranteed a higher benefit. The highest benefit.
So yes, it’s smart to wait. And then enjoy more of the fruits of your labors.
Obviously, if we knew we were going to die young we’d take it right away. But most of us do not die young.
And some people simply have to take it early because of their personal situation.
What I’ve seen a lot, though, is people who simply refuse to take the longer view.
But bottom line: you will get the biggest pay out possible if you wait until age 70.
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