Social Security: it's all about timing

Published: Friday, Feb. 14 2014 3:35 p.m. MST

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Realistically, there is no one-size-fits-all answer to when you should choose to recieve your Social Security benefits. According to Forbes, the decision to begin taking your benefits can wield an immense effect on your retirement revenue.

“The decision is complex and depends on a lot of variables like your current and future financial situation, how long you expect to live, and what other sources of income you may have,” says Forbes' Tomas and Robert Fross. "Taking Social Security early reduces your benefits, but it also means you’ll receive monthly checks for longer,” while delaying the checks increases the monthly benefits by 3 to 8 percent annually.

Similarly, CNN Money's Allan Sloan says that at 62 years of age you receive 75 percent of your normal benefits. You receive 100 percent at the age of 66 and at 70, it grows to 132 percent.

Sloan says to think of waiting until you are 70 as longevity insurance. “The conventional wisdom is to wait until you're 70 to draw benefits if you can afford to,” relying on other investments until that point.

The ideal solution, according to MSNBC’s John W. Schoen, is to estimate your life expectancy.

However, considering how hard that can be, Schoen says that in the end, “since you don’t know how long you’ll live, your decision will likely have less to do with maximizing your total payout and more with your personal retirement plan. Collecting early means locking in a lower payment for the rest of your life.” He goes on to say that if you need the money then, it is a good option that allows your tax-deferred savings and investment to continue to accumulate returns.

Forbes' Thomas and Robert Fross summed it up best writing that "the most important thing to remember about Social Security timing is that there’s no approach that’s perfect for everyone."

As all of the experts cited above, it is recommended that you consult a financial expert when planning your retirement.

Erik Raymond is experienced in national and international politics. He relocated from the Middle East where he was working on his second novel. He produces content for DeseretNews.com. You can reach him at:

eraymond@deseretdigital.com

@RaymondErik

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