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Blog Articles: Timing on Taking Social Security

Comparing a Traditional vs Roth IRA
Figuring out when to claim Social Security is one of the most daunting challenges of retirement. In some cases, claiming early makes sense. In many other situations, it pays to wait.

The largest percentage of Americans start getting their benefits at age 62, according to a 2020 analysis by the Bipartisan Policy Center.  Beck & Lenox Estate Planning & Elder Law, LLC, works with retirees on the entire financial spectrum and understands the pros and cons of selecting the timing on taking Social Security.

Money Talks News’ recent article entitled “This Is When the Most People Start Taking Social Security” reports that the study found that for both men and women, the most popular ages for beginning benefits are:

  • Age 62
  • Age 66
  • Age 65

Approximately 35% of men and nearly 40% of women take benefits at 62. That’s the earliest possible age of eligibility for most Americans.

Taking benefits that early can be a smart move in some circumstances. For example, it may be appropriate if you absolutely need the money or have health problems that indicate you may not live a long life.

However, the Bipartisan Policy Center explains that taking benefits early can be hazardous to your financial health:

“The income losses from early claiming are quite large. A study commissioned by United Income estimates that today’s older Americans will lose a total of $3.4 trillion in potential income because of early claiming, with an average lifetime loss of $95,000 per household.”

However, retirees look to be increasingly aware of this. Research shows that in recent decades, the percentage of both men and women taking benefits early has steadily declined.

The Bipartisan Policy Center says the United Income study found that the poverty rate for Americans over 70 would fall by nearly half — from 13% to 7% — if every older American claimed Social Security at the age that maximized lifetime income.

As you can see, selecting the timing on taking Social Security payments can mean the difference between a pleasant retirement and worrying about money in your golden years.  If you are unsure of what is best for you, find a qualified estate planning attorney to review the pros and cons for your specific situation.  Beck & Lenox can help.

Reference: Money Talks News (Jan. 20, 2021) “This Is When the Most People Start Taking Social Security”

 

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