Age To Take Social Security Benefits

Starting at Age 62 a person is eligible to take Social Security benefits. You can start receiving these benefits anytime until age 70. The question is when should you take them?

A penalty exists for taking benefits early:

• When collecting Social Security before the normal retirement age the benefit is reduced.
• If benefits are received early, the reduction is 1/180 per month for the duration
• For a person retiring 3 years early this is a 20% reduction, 2 years is a 13% reduction, and 1 year is a 7 % reduction.

A bonus exists for taking benefits later:

• If benefits are received at a later date, the benefit is increased.
• This increase is 1/240th per month for the duration
• For a person retiring 3 years later this is a 15% increase, 2 years is a 10% increase, and 1 year is a 5 % increase.

If you do the math all of the option converge when a person is in their mid 80's. Taking benefits early gives the most money for a person living only up to the mid 80's. Taking benefits later gives the most money for a person living after the mid 80's.

What is the best time to take benefits? The above info suggests that it only depends on how long you are going to live and nobody knows the answer to the question. This is a tough question.

Actually, the best thing to do is to have a retirement plan and consider a number of factors before making this decision. Get guidance from a professional on this issue.