When should you take Social Security retirement benefits?

If you want to know when you should begin taking Social Security retirement benefits, you have good company. Software programs have been developed to deal with the question and multiple commentators take different views.

To further complicate the question, if you are married you might want to consider when your spouse begins and align that information with your own. Your spouse could claim on her or his own benefit record or, alternatively, claim on one half of yours with possible adjustments based on whether she or he takes it early, such as at age 62, or later. A little known fact also is that persons who divorced after at least ten years of marriage and did not remarry or remarried after the designated age might claim on their former spouse’s Social Security record.

Today, with COVID-19, Social Security offices are not generally open for regular business to answer these and other questions. Here are some ideas to get started.

When to claim Social Security is a different question from when to stop working. You could work and take Social Security or retire from work and delay. While there is no right answer for everyone, a common theme today if you are the primary earner is to wait, if you can. One excellent summary released by the National Academy of Social Insurance is www. nasi.org/WhenToTakeSocialSecurity. The returns for waiting can be substantial and they last for life. The longer you live, the more valuable the benefit but there are exceptions.

Claiming at age 62, 66 and 10 months, or 70 — the results.

The earliest age when a nondisabled worker or former worker can claim for Social Security retirement on his or her own earnings record is age 62

which is four years and 10 months earlier than current full retirement age, now 66 and 10 months. The maximum benefit is tagged at age 70.

If you turn age 62 in 2021, your benefit would be about 29.2% lower that it would be at full retirement age at 66 and 10 months. If you wait even longer to age 70, the increase is roughly 8% per year. The downside of waiting, of course, is that it takes time to make up the difference.

If current illness or other factors would cause the worker or retiree to think that she or he would have a reduced life span, then taking the benefit earlier might be a wiser choice.

A worker who continues working in his or her job after claiming benefits before full retirement age, might have an added disincentive. If he or she earns more than the earnings limit (now $18,960), then $1 of Social Security payment is deducted for each $2 additional earned. During the year when the person reaches full retirement age, the deduction drops to $1 for every $3 earned. You can work while collecting but keep your earnings under $18,960 to avoid reducing the amount.

Another question is how long do you figure to live?

Long life vs. short life.

If you expect to live a long life and can afford to wait, then delaying your Social Security can make sense. The tradeoff is a higher benefit later. Employer pensions with rare exception — most often in the public sector — are almost a thing of the past and expenses in retirement especially health care continue to increase.

The added security of a higher guaranteed monthly benefit for the remainder of your life could be preferable. On the other hand, current financial hardship might make sense to take Social Security earlier. You also might need to consider not just your own life but your spouse’s also.

Claiming on another lifetime earning record — derivative benefits and death benefits.

Social Security decisions affect not only the worker but the worker’s spouse and, in some cases, the worker’s child or children and possibly even a parent. If you die first and your surviving spouse was receiving less in Social Security than you were, she or he could “step up” to your benefit. On the other hand, where there is a disabled child in the household, claiming Social Security could open up a benefit for your child. This could be a motivator for claiming earlier.

If you have questions, seek help. The calculation can be worth it.

Janet Colliton, Esq. is a Certified Elder Law Attorney and limits her practice to elder law, retirement and estate planning, Medicaid, Medicare, life care and special needs at 790 East Market St., Suite 250, West Chester, Pa., 19382, 610-436-6674, colliton@ collitonlaw.com. She is a member of the National Academy of Elder Law Attorneys and, with Jeffrey Jones, CSA, cofounder of Life Transition Services LLC, a service for families with long term care needs. Tune in on Wednesdays at 4 p.m. to radio WCHE 1520, “50+ Planning Ahead,” with Janet Colliton, Colliton Elder Law Associates, and Phil McFadden, Home Instead Senior Care.