3 early social security claim scenarios make more sense than waiting

Social security is now a substantial source of income for millions of pensioners. That's why we usually advise older people do not file claims at the beginning. Although your benefits are calculated on the basis of your average salary (adjusted for inflation) during the 35 most profitable years of your employment, you are only entitled to claim them in full after you will have reached the age of retirement. Depending on your year of birth, this age is 66, 67 or somewhere in between.

However, the Social Security Administration will allow you to claim benefits as early as age 62, but in exchange for a permanent reduction in monthly payments. This will also allow you to delay benefits after retirement age and accumulate credits that will increase your payments by 8% per annum until your 70th birthday.

The disadvantage of claiming benefits early is clear: you will lose an income that could prove useful during your golden age, especially if your savings are not particularly solid. In the worst case, your benefits could be reduced by 30% if you drop at the age of 62 with retirement age to 67, which is a considerable success. But sometimes making this decision makes sense, and if any of the following scenarios apply to you, we might want to file files as soon as possible.

1. Your health is extremely bad

Social security is technically designed to pay you the same total amount of your life, no matter when you file your claim, provided you live an average life expectancy. But if your health is really bad, you will usually be better off filing your claims earlier because you will get the highest possible payment for life.

Imagine that you are entitled to a monthly benefit of $ 1,500 at the retirement age of 67 years. Claiming benefits at age 62 will reduce each monthly payment you receive to $ 1,050, but you will collect 60 additional payments so that you reach the age of 78 1/2, you will have about the threshold profitability (that is, you will have collected the same total, which you have ranked at 62 against 67). But if your health is really bad and you do not think that you will reach 78 1/2, it is better to classify early. In this example, you will earn $ 36,000 in your lifetime if you drop to age 62 (up from $ 67) but live up to age 72.

2. You do not have any other source of income

Many people lose their jobs in their early sixties or find themselves unable to work because of health problems or the need to take care of a loved one full time. If this has happened to you and you do not have enough savings to cover your expenses, it is wise to claim social security sooner. If you do not start receiving benefits, you may have no choice but to seriously incur debt to pay your bills, which will not cost you any money in the long run. , to not hurt your credit and create a world of stress.

3. You do not really have need money at all

By calling for social security early, the danger is to reduce a large income stream for life and fight after the fact. But if your savings are so important that you can easily afford your living expenses without these benefits, you can also claim them quickly and enjoy them when you are younger and have more energy to exploit them at best. For example, if you plan to travel, it goes without saying that you will be better able to travel the world at 62 than at 67. In this case, you can also apply for Social Security as soon as possible. .

Although you often hear that claiming social security early is a dangerous operation, in some cases it makes sense. Think about your personal situation when you decide to file a return because you may find that it is better to take benefits in advance.