Be Smart About Social Security in Yorktown Heights, New York

The closer you get to retirement, the more enticing those Social Security benefits become.  However, you should make an informed decision about when to take those benefits, so you don’t make a costly mistake.

Yes, you’re eligible to start taking Social Security benefits when you turn 62.  However, that doesn’t mean you should. The longer you can delay claiming benefits, the better. In fact, if you start getting benefits too soon, you could put a good-sized dent in your overall benefits.

CNBC’s recent article, “This is when it makes sense to claim Social Security early,” explains that if you wait until full retirement age (usually either 66 or 67, based on when you were born), you’ll receive 100% of the benefit available to you based on your personal work record. If you wait until age 70, your retirement benefits will also be even more, because delaying past full retirement age lets your benefits grow by 8% per year, until you reach that age.

In effect, delaying your claim until 70 could bring your benefit amount to 132%. It’s usually best to hold off on claiming as long as you can.

Usually, it only makes sense to claim your benefits early in limited circumstances. For instance, if you're single and you're terminally ill and you know you're not going to live very long, you might go ahead and file early.  However, in most other situations, it does not make sense to claim early. Even if you know you won't live a long time, if you're married, claiming early could reduce the amount of benefits your spouse will have access to, once you're gone.

Survivor benefits are determined by the age a person dies and the amount of Social Security credits they had accrued. If you wait to claim benefits, you’ll have more credits and a larger benefit to pass on when you die.  However, the amount survivors can access, also depends on when they claim the benefit.

A surviving spouse can file for widow or widower benefits starting at age 60. However, that benefit amount will be reduced. Instead, if that person waits until their full retirement age, they’ll be eligible to receive 100% of their spouse's benefit amount.

Those eligible for survivor benefits can elect to claim those funds or their own retirement benefits, if they’re eligible for them. Therefore, they could take the survivor benefit and let their own benefit grow up to age 70.

And don’t forget that the longer you can delay taking Social Security benefits, the better you’ll be in terms of cost-of-living adjustments (COLAs). Those will be based on the higher benefit amount. When it comes to Social Security, patience is more than a virtue—it’s an income boost.

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