Social Security Archives

Choosing when you’ll start collecting Social Security benefits is a personal decision and the right time to begin varies from person to person.

EARLIER ISN’T ALWAYS BETTER

You’re eligible to begin collecting Social Security as early as age 62, but that means you’ll receive a lower monthly payment, in some cases nearly 30% less than if you wait until you reach what the Social Security Administration calls your full retirement age. Depending on when you were born, this is somewhere between ages 66 and 67. Waiting four or five more years can increase your monthly and lifetime payout significantly.

Waiting the extra years until you reach full retirement age may not be a viable option if you’re no longer working, have limited retirement savings and need the money to pay your bills. In that case, collecting Social Security is the right move.

A DELAY CAN PAY

If you’re still working or have retired but have other accessible retirement funds, waiting until you’re age 70 to start collecting may make sense. That’s because for each year you wait beyond your full retirement age, up to age 70, your annual benefit increases by 8%. That means you could see up to a 32% increase in your monthly payment.

EARLY INVESTING

Maybe you’re thinking about claiming your benefits at age 62 and investing the proceeds because you don’t need the money. Keep in mind that if you invest those funds in the stock market, there’s a chance you’ll lose some money—or you could earn more than 8% annually.

Depending on your other sources of retirement income, this may or may not be the right option for you. Check with your financial professional to discuss your situation.

ADDITIONAL CONSIDERATIONS

Some non-working spouses may be entitled to payments of up to 50% of the working spouse’s benefit amount. These spousal payments don’t decrease the amount of benefit received by the working spouse.

Also, you may be able to collect benefits based on your former spouse’s earning record if you were married at least ten years, been divorced for at least two continuous years, are currently unmarried and at least age 62.

FAST STIMULUS PAYMENTS

The IRS successfully delivered millions of stimulus payments during the COVID-19 pandemic last year. Within two weeks of the passage of the CARES Act, the IRS distributed $147 billion to more than 81 million people. By comparison, in 2008, the last time stimulus payments were issued by the IRS, it took 75 days to get the first payments out. With the launch of the Get My Payment tool, an additional 16.6 million requests for payment were received. By the end of October 2020, the IRS had delivered approximately $270 billion in stimulus relief to taxpayers.

SOCIAL SECURITY INCREASES

Approximately 70 million Americans are seeing a 1.3% increase in their Social Security benefit payments in 2021. Federal benefit rates increase when the cost-of-living rises, as measured by the Department of Labor’s Consumer Price Index. These cost of living adjustments were first enacted in 1972 and automatic annual adjustments began in 1975. The year that saw the highest adjustment was 1980 with a 14.3% increase, while there have been several years with no adjustment, most recently 2016.

WOMEN’S HISTORY

National Women’s History Month goes back to 1857 but wasn’t officially recognized by Congress until 1981. According to the U.S. Census Bureau, women age 85 and older outnumber men in the same age bracket two to one. And overall, there are slightly more females than males in the U.S. In 2018, there were 166 million women compared with only 161 million males and earnings difference still exist. While 58% of women, age 16 and older, participate in the workforce they only earn 82% of what males earn for similar work.