This is a common question that many people have: “When should I claim Social Security”? Understandably so, as there are many factors that go into making this decision, even excluding your overall lifetime benefit received. Sure we all want to maximize our Social Security money, but do we want to do this at the cost of losing some financial freedom (read as cash flow) early-on in retirement? So why is this decision so complex?
Let’s take a look at some of the factors that go into making this decision:
Am I (or is my spouse) going to work past the age of 62 - noting that if an individual works and claims Social Security, part of their benefit can be withheld if income rises to high
How long are you planning on living - this is a tough one to answer as none of us know how long we are going to live; however, if longevity runs within your family and you are the epitome of health, you may want to consider the longevity annuity aspect of delaying Social Security
How much do you have saved and what are your goals or plans in retirement - if goals and money saved align correctly, you may be able to fund your early years of retirement with only your retirement savings, thereby, allowing your Social Security benefit to grow
Are you invested correctly and what do the market’s sequence of returns project for your portfolio - you need to make sure you are not assuming too much or too little risk with your portfolio’s allocation to stocks and bonds, thereby permitting your retirement savings their best chance at funding your goals
What is your marital status - can you take of advantage of claiming strategies, e.g., allowing the higher earner’s benefit to grow by delaying claiming
Are these some of the questions you are asking about when to claim Social Security? If so, you are on the right track. These are the very questions that we answer every day at Intelligent Investing. If you have questions like these, please feel free to contact Intelligent Investing at www.mynmfp.com/new-clients to begin your Social Security claiming discussion.