This Social Security Decision Guarantees You’ll Get a Lower Benefit, but It’s Not Necessarily a Bad One

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(Maurie Backman)

If you’re eligible for Social Security benefits after retirement, you’ll be given a choice when you sign up. You can wait until your full retirement age (FRA), when you are entitled to your full monthly benefit based on your earnings history. FRA is 66, 67 or somewhere in between, depending on your year of birth.

You can also apply for Social Security early if you are willing to accept a reduced monthly benefit for life. The earliest age to enroll is 62 years old.

On the other hand, you can defer your Social Security application outside of FRA and increase your benefits in the process. This incentive expires at age 70, but until then you can give your benefits a permanent 8% increase for each year you wait to file the FRA.

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You will often hear that filing for Social Security with FRA is a mistake because it guarantees that you will be stuck with a lower monthly benefit for life. But while you lock in a smaller payout by filing early, that’s not necessarily a bad choice.

Look at the big picture

Some people end up relying heavily on Social Security to make ends meet when they retire. But if you’re in good shape financially, you may have plenty of wiggle room to claim your benefits early and use that money to pursue goals that are easier to achieve while you’re younger — things like climbing certain mountains or getting active his journey.

Imagine sitting on a $2 million nest egg. Filing for Social Security early may mean you get less money each month, but you may also have enough savings to cushion that blow. And that way you might get your money at a time when you can do more with it.

You also never know what age you will live to – no one has a crystal ball. But if you don’t end up living a very long life, you could get ahead financially by claiming Social Security before FRA and getting your hands on that money sooner.

Finally, filing early can help you take better care of your health. If you have a stressful office job that constantly raises your blood pressure and forces you into a sedentary lifestyle, it can have negative physical effects. Claiming Social Security before FRA could mean leaving that job — and enjoying a healthier lifestyle.

Ignore the warnings and make your own decision

There’s a real danger to settling for a lower Social Security benefit for life, and it’s one you’ll have to reconcile if you’re thinking about filing early. But don’t assume that claiming Social Security for FRA is a disastrous choice.

Instead, consider your own circumstances and what you might gain by accessing your benefits a few years ahead of schedule. You may find that the advantage of getting your money faster far outweighs the disadvantage of a smaller monthly check for life.

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The Motley Fool has a disclosure policy.

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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