5 Questions to Determine When to Take Your Social Security Benefits

If you are having trouble deciding when to take your Social Security, here are five questions that will help you make the right choice for you. I'm Tyler, a former financial advisor and portfolio manager. Just because I'm taking at 62 doesn't mean you should take at 62.

1. Can You Afford to Wait?

Taking benefits at 62 versus your full retirement age of 66 or 67 reduces your benefits on average by 30% annually. If you can’t afford to wait, then you need to take it earlier.

2. How Long Do You Expect to Live?

No, we don’t have crystal balls, but we need to make an educated guess. The breakeven point for choosing to wait until full retirement age isn’t until 77 years old. Currently, the average American’s lifespan is around 79 years. The longer you expect to live past your breakeven point, the more it makes sense to take your benefits later.

3. Are You Married?

Let’s stop being selfish for a minute. Waiting to take your own Social Security benefits can lead to an increase in spousal benefits in the long run.

4. How Will This Be Taxed?

Go directly to your CPA because I am not one. Remember that up to 85% of your benefits can be taxed if you exceed a certain income threshold.

5. Do You Plan on Working Past 62?

Starting in 2024, your benefits can be reduced by up to $1 for every $2 you make over the income limit of $22,320. That's a pretty big hit.

So remember to consider these questions carefully when making your decision about Social Security.

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