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When should you start taking Social Security?

This is a question we do the math for clients all the time.

Typical average benefits are about:

Age 62: $1,348

Age 66 years, 4 months: $1,828 (Full baby boomer-ish retirement age.)

Age 70: $2,364

If you take your Social Security at age 62 you will collect about 52 months of benefits at the rate of about $1,348 per month for 52 months prior to reaching full retirement age. That works out to $70,096 but at the cost $480 per month for every month you live past age 66 years, 4 months. At age 66 years, 4 months you would have had about a $1,828 monthly benefit.

Okay is this worth it? If you divide $70,096 by the $480 that works out to 146. In other words you'd have to live 146 months or 12 years, 2 months past age 66 years 4 months to break even.

You would be age 78 years, 6 months old when you broke even. The argument for this is you would have the additional income to enjoy while you're younger.

BUT every month that you live past age 78 years, 6 months "costs" you $480 for the rest of your life. If you die anytime prior to age 78 years, 6 months...YOU WON!

Okay, what if you wait until full retirement age, the 66 years, 4 months-ish?

Now your benefit is $1,828. Take it now or wait until age 70 for the $2,364 per month?

This is an interesting calculation:

You're only 3 years, 8 months from the maximum benefit or 44 months from the BIG pay day. That works out to $80,432 you'd receive prior to age 70, but at the cost of $536 dollars per month.

Once again divide the $80,432 by the $536 reduction. That works out to 150 months or 12 years, 6 months, you'd be age 78 years 10 months to break even. So every month you live past age 78 years, 10 months costs you $536 per month, you lose. If you die prior to 78 years, 10 months you WIN!

Okay, let's look at the two extremes age 62 vs 70?

Age 62 monthly benefit: $1,348.

Age 70 monthly benefit: $2,364.

A difference of $1,016 dollars per month!

Collect at age 62 means you got $1,348 for 8 years or 96 months prior to being age 70.

That works out to $129,408 dollars that you got to enjoy from age 62 to 70 but at the cost of $1,016 dollars for every month you live past age 70. 

Now take the $129,408 and divide it by the $1,016. That equals 127 months or 10 years, 7 months.That means for every month you live past age 80 years, 7 months costs you $1,016 per month.

So what should one do?

If you're in poor health take the money at age 62.

If you have sufficient income and are in good health or still earning current income you're better off waiting until at least full retirement age and unless you NEED the money by waiting only another 3 years, 8 months you're in the BIG money at age 70!!!

Also keep in mind there is the Medicare Part B monthly premium ($134 in 2017) taken out of your Social Security if on traditional Medicare. This throws a calculation wrench in to taking the Social Security benefit at age 62 because in just 3 years, at age 65 your Social Security is reduced from the $1,348 to $1,214.

Again, bottom line is, if you're in poor health take the money at 62, otherwise wait until at least full retirement age and if you have excellent health and sufficient income wait until age 70.
Fiduciary Financial Consultant
Office: 727-945-8599
Toll Free: 1-877-331-GARY
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Gary D. Spicuzza,

The Trust Group
2435 U.S. Hwy. 19
Suite 125
Holiday, FL 34691

Office: 727-945-8599