Is it Ever a Good Idea to Claim Social Security Early?

We often remind our readers that claiming Social Security benefits earlier than full retirement age can result in smaller checks for the rest of your life. Likewise, waiting beyond full retirement age can actually help you earn larger checks - up to 8 percent larger for each year you wait, up to age 70.?

So you might be wondering, “Is it ever a good idea to claim Social Security benefits early?” Actually, yes. In some cases it does make sense to go ahead and start receiving your checks before full retirement age.?

You want to pay down debts before beginning withdrawals from your retirement plan. You’ll need to live off of a combination of retirement savings, Social Security, and any other income that you’ve established for the rest of your life. But if you’re carrying significant debts into retirement, those can eat into your monthly budget. Claiming Social Security benefits now can help you pay down debts faster, and lower the amount that you eventually pay toward interest.?

You’ve already banked your 35 highest-earning years. Social Security payments are calculated based upon the 35 highest-earning years of your career. If you’ve already banked those years, you won’t increase your checks this way. However, claiming those checks before full retirement age will still mean that they are reduced a bit.?

You need to quit working. At some point, you might need to retire earlier than you had planned. Industry layoffs, health issues, and other factors can force a change of plans. The good news is that you can go ahead and start enjoying your retirement now. But you might simply need more funds in order to do so. In this case, you might claim Social Security early out of necessity.?

You’ve cut down to working part time. Some people choose to gradually cut back on work hours, and ease into retirement. If you’re only working part time, you might be able to claim Social Security benefits now. Some of your benefits will be withheld according to earnings, so let’s discuss this issue in depth in order to help you decide whether this choice is worth it.?

You’re in poor health or have been diagnosed with a terminal illness. In the event that you expect a shortened lifespan, it usually makes sense to go ahead and claim your Social Security benefits now. After all, checks stop when you pass away, unless you have survivors entitled to benefits.?

No one is relying upon your benefits. After you pass away, it is possible for a surviving spouse or disabled child to draw at least part of your scheduled benefits. You would ordinarily want to maximize this amount as much as possible in order to provide for them. But if no one else will be relying upon your checks, you might as well claim them now if it otherwise suits you to do so.?

Timing your claim for Social Security can be a complex issue, and certain other situations can be factored into this decision. Call us before you retire, so that we can help you decide upon the best time to file your claim.?