Experts often recommend postponing claiming Social Security. However, there are situations in which you should claim sooner.
Many people think claiming Social Security benefits as early as possible is a bad idea. That's because claiming before your full retirement age will result in smaller monthly payments. However, the reality is that everyone's circumstances are different, and for some, it makes sense to start claiming benefits as soon as possible.
Money Talks News' recent article entitled “5 Times When It's Smart to Claim Social Security Early” gives several situations in which you shouldn't delay claiming your Social Security retirement benefits.
- You have a short life expectancy. If you claim earlier than your full retirement age as determined by the Social Security Administration, you'll receive smaller monthly payments over a longer period of time. If you delay, you'll be getting larger payments over what is likely to be a shorter period of time. If you expect to have a short life expectancy, it might be wise to start taking the smaller monthly benefit as soon as possible.
- You need the money. You could need the money right away for your living expenses. However, the age at which you claim determines the amount of your monthly benefit going forward.
- You've got children still at home. Increasingly, people are reaching age 62 with minor children at home. If so, claiming your Social Security benefits early makes sense because it generally lets you to apply for additional benefits to help you care for minor children. You must apply for your retirement benefits before you can apply for benefits related to dependents.
- A higher-earning spouse has health problems. When considering whether to start taking Social Security benefits at 62, you also need to think about when your spouse might die — and how much he or she makes compared to you. It's a situation to consider when the higher-earning spouse has medical problems because, after a spouse dies, you may become eligible for survivor benefits (also called widow's or widower's benefits) based on the spouse's Social Security. So, if your spouse has a short life expectancy, and you know your survivor benefits would be more than your own full retirement benefit, there may be no reason for you to delaying for your full retirement benefit.
- A lower-earning spouse is older than you. Perhaps your spouse earned much less than you during your working years. Their benefit will be lower than yours, and their benefit might even be lower than the spousal benefit they'd get based on your earnings. However, as with benefits issued based on your own work history, your spouse can only claim a spousal benefit based on your work history after you file for your own retirement benefits.
Add up the cumulative benefits, and you may see that your total monthly income is better when you file for your benefit early and your older spouse elects to take the spousal benefit.
Reference: Money Talks News (June 29, 2021) “5 Times When It's Smart to Claim Social Security Early