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whats the best age to take social security

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What Is the Best Historic period To Take Social Security?

shapecharge / Getty Images
shapecharge / Getty Images

The age-old contend over what is the all-time historic period to take Social Security seems like it will never end.

Part of the reason is that there is no black-and-white reply. Like many financial computations, your ain personal state of affairs volition determine what the right age for you is, even if it's unlike from your friends, family unit members or those in the fiscal printing.

The bottom line is there are pros and cons to taking Social Security at any age, and you'll have to counterbalance what makes the nigh sense for you lot in terms of your financial security. Here'southward a look at three common times retirees have Social Security, along with the reasons they may or may not exist the best choice for you.

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Historic period 62 (Early Retirement)

Maybe not surprisingly, age 62 is a popular age for retirees to merits Social Security, with more than than 25% opting for this choice. After all, there's definitely some entreatment to getting what feels like "free" money from the government as soon equally possible. And, for some retirees, this is the best choice.

If you have few other sources of income, for case, and Social Security will put food on the table, then you might have little choice than to claim early. Others choose age 62 because they want to go checks for as long every bit possible. And still others have the opportunity to live overseas in a depression-cost country, where the size of a Social Security bank check, fifty-fifty at age 62, tin exist enough to live on.

Be aware that the biggest drawback of drawing Social Security at age 62 is that you lot are permanently reducing the amount of your bank check, to the tune of near 30% less than you would receive if you waited until age 67.

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Age 67 (Full Retirement)

For those born in 1960 or afterwards, full retirement, as designated by the Social Security Administration, begins at historic period 67.

As the life expectancy for Americans has lengthened significantly since Social Security was introduced in the 1930s, more and more are not only living longer but also working longer. Whereas retirement used to hateful a gilded picket and a pink skid at age 65, many Americans now piece of work until 67 and beyond. This is at least part of the reason the pct of Americans taking Social Security at historic period 62 has been dropping this century — downwards from effectually 50% in the mid-2000s.

The bottom line is that if you plan to work until at least full retirement, in that location may be no need to take Social Security early. By waiting until age 67, a $ane,400 monthly do good at historic period 67 will grow to about $2,000 – and this "pay raise" is permanent, for the balance of your life.

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Age 70 (Tardily Retirement)

If you can wait until age 70 to claim your Social Security benefits, yous're in rare company. Only about 5% of men and 7% of women file at historic period 70, according to the Social Security Administration.

The reasons for this are numerous. First, many retirees simply can't afford to look eight years after age 62 to start receiving benefits. 2nd, Americans in poor wellness may fear not fifty-fifty surviving until age 70 or being in a condition where they're unable to enjoy their benefits.

Just, if you lot don't need the money — perhaps y'all programme to continue working or y'all have another source of retirement income — or if yous're in excellent health, waiting until 70 comes with a huge payout. If y'all were born in 1943 or later, for each twelvemonth that you lot delay claiming Social Security after age 67, your checks will rise past 8% annually. That's simply shy of the boilerplate almanac return of the stock market, one of the best performing asset classes, without any of the chance. That ways a $2,600 monthly do good at age 67 could grow to about $3,300 at age 70.

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What Is the Breakeven Signal?

Social Security has a breakeven betoken at which y'all'll have drawn the aforementioned corporeality of benefits regardless of when y'all started. For case, imagine you have the option to draw $1,500 monthly at age 62 vs. $2,100 at historic period 67. If you first at age 62, you'll have fatigued $90,000 by the time yous hitting historic period 67. Since you'd be earning an additional $600 per month if yous had waited until age 67, it volition take you 150 months, or 12.five years, to reach your breakeven point. In this case, once you reach age 79.5, you'll have earned the same amount of money whether y'all started at historic period 62 or waited until historic period 67.

If you're looking to maximize your total benefits, you'll have to make a guess as to whether you expect to live beyond the breakeven bespeak. Of course, no one tin can know with certainty how long they volition live, but you tin can factor in variables such every bit life expectancy tables and your own general health and well-being to make an estimate. If yous're a healthy individual who comes from a long-lived family, for example, you'll probable earn the most by waiting until historic period 70 to begin drawing benefits.

The Lesser Line

There is no definitive answer equally to when y'all should have your Social Security benefits. Factors ranging from your health, your current retirement savings, your life goals and your hereafter retirement date all play a function in helping make up one's mind when the best age is to maximize your benefits.

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This article originally appeared on GOBankingRates.com: What Is the All-time Age To Have Social Security?

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Source: https://finance.yahoo.com/news/best-age-social-security-200029030.html

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