The Best Reason to Take Social Security Long Before Age 70 @themotleyfool stocks
Securing financial stability in retirement is a puzzle many Americans try to solve as they approach their golden years, and deciding when to take Social Security benefits is a significant piece of that puzzle. While conventional wisdom suggests waiting until age 70 to maximize the monthly benefit amount, there are compelling reasons to start those benefits long before then.
One of the best reasons to consider taking Social Security early is if you need the income. For individuals who have been forced into early retirement due to layoffs or health issues, Social Security can serve as a critical lifeline. Additionally, if your lifestyle does not require the larger benefit that comes from delaying and you have adequate savings, starting Social Security payments earlier can help you enjoy your retirement sooner.
Health is another crucial consideration. If you have a medical condition or family history that suggests you may not live long enough to benefit from the higher payments that come with delaying benefits, it’s wise to start collecting sooner rather than later. The break-even point where the total benefits received would be equal whether you start early or late doesn’t occur until your late 70s or early 80s for most people. Thus, if longevity is not on your side, taking Social Security at an earlier age ensures you maximize the benefits available to you.
Moreover, starting benefits early can offer psychological peace of mind. Some retirees find that having a steady income stream helps them worry less about market volatility and its impact on their investment portfolios. This can be especially true for those heavily reliant on investments for retirement income.
Finally, for those with plans that include travel, hobbies, or other activities that require more funding earlier in retirement rather than later, taking Social Security benefits early can help fund those dreams. After all, retirement is not just about financial survival but also enjoying the fruits of years of labor.
Though each individual’s circumstances are unique and should be reviewed with a financial advisor, these considerations demonstrate why it might make sense for some to depart from the standard recommendation and start their Social Security benefits before reaching age 70.