If you are nearing retirement age, you may be struggling with the big “social security” decision: should you take a reduced Social Security benefit at age 62 – or wait to receive the maximum benefit at age 70? In this article, we will examine if it is worth the wait.
What is the difference? Waiting until the age of 70 to tap into your social security benefits will result in a monthly check 77% higher than if you choose to receive your check beginning at age 62. However, biding your time during those extra years to achieve the highest possible benefit amount is not a luxury that all seniors have. In fact, with the cost of food, gas, and utilities rising every day, many find that they need their social security check just to survive – and they need it now.
Why to Cash In Early
The primary reason individuals take their Social Security before the age of 70 is simple and obvious – they need the money.
We all wish that everyone had plenty of retirement savings, that their home was paid off, and that social security is just a bonus. But the harsh reality is quite different – half of the senior adults (65+) in America depend on Social Security for at least 50% of their monthly income. The Center on Budget and Policy Priorities has revealed that 40% of seniors would be considered living under the poverty level without their Social Security benefits.
Most people have some retirement savings, but life doesn’t always go as planned – and they may not have as much as they hoped. Seniors find themselves retiring early for several reasons. Health issues can make work challenging, and some seniors also have the responsibility of caring for a sick spouse or family member. Senior citizens in this country are especially susceptible to layoffs and can face rampant age discrimination when they look for new work to replace their paycheck.
Therefore although waiting until 70 may provide the heftiest check, those currently struggling to pay for their housing, medical care, gas, groceries, and utilities do not have the luxury of waiting. The good news is that the money is available for their use.
Other Reasons to Take the Money Early
Even if your resources are sufficient to cover your lifestyle in your 60s, other situations may dictate taking the money out early.
For instance, some seniors may still want to travel while relatively young and active, and their social security benefit helps them to do that. Others may not want to take money out of investments currently, as the market is low. You may want to help your family financially during this time. All of those reasons are valid for drawing your check early. After all, it is your money – and if you have the retirement savings to back it up, you can enjoy life to the fullest.
There is no “right age” for cashing in on your social security – everyone’s situation is different. If you have money and are in good health, you may hold out until 70 to ensure that your golden years are well-financed. You don’t want to outlive your resources! But beginning benefits earlier may be a good move if you have significant health issues and need help day-to-day.
What if Your Check Doesn’t Cover Your Needs?
As mentioned above, sometimes unexpected challenges can arise and catch us unprepared. If you are one of the many seniors who just can’t seem to make ends meet and are struggling under debt, help is available.
Call the bankruptcy attorneys at Richard V. Ellis for a free consultation. We can help you to assess your financial situation and decide if bankruptcy is the right solution for you. Don’t let financial worries ruin this special time of life – call us today.