People sometimes think that sooner is better, but this is not always the case. When it comes to your Social Security benefit, you surrender some of what you have earned if you decide to take your benefit early.
It is possible to start to draw a Social Security benefit when you are as young as 62 years of age, assuming you paid into the program sufficiently. You can earn up to four retirement credits per year, and most people do, because the requirements are modest. Once you have 40 credits, you qualify for Social Security benefits.
One of the drawbacks to take into consideration before you decide to take an early benefit is the fact that you would receive a reduced benefit. The exact amount of the reduction would depend upon your birth year, but it would be somewhere between 25 percent and 30 percent.
This is one negative to weigh, but there is another that would impact many people. Most individuals are still going to be working when they reach the age of 62. The prospect of receiving a Social Security payout while you are still earning a paycheck can sound appealing.
However, if you take the early benefit, you are penalized by one dollar for every two dollars that you earn that is in excess of $15,720. We should point out the fact that this is the figure for 2015, but it is adjusted on an ongoing basis to account for inflation.
As you can see, there are some compelling reasons why you may want to wait until you reach the age of full eligibility. The ideal course of action will depend upon your personal circumstances.
Since women have longer lifespans than men, sometimes a woman will accept an early benefit while his or her spouse is still earning a good living. The husband waits until he is eligible for a full benefit, and at that point, unlimited on-the-job earnings are allowed, and there are no penalties.
Learn More About Social Security
We have provided some very basic information about Social Security and the early benefit in this brief blog post. If you would like to obtain detailed information, you are in luck. Our firm is conducting a Social Security seminar on October 26th in our Smithtown office.
This seminar will provide you with a great deal of very useful information, and there is no charge to attend. However, since space is limited, we do ask that you register in advance so that we can reserve your seat.
To obtain more details and registration information, visit the following page: Smithtown NY Retirement Planning Seminar.
Visit Our Forbes Page
We are regular contributors over at Forbes.com, and you can click the following link if you would like to build on your knowledge: Forbes Contributor Mark Eghrari.