Conventional wisdom says to delay social security benefits for as long as possible, however, that’s not the best strategy in all cases. In fact, there are several compelling reasons why collecting Social Security at age 62 could be the right decision for certain individuals.
Life Expectancy: Many financial analyses focus solely on the breakeven point, usually around age 80 or 81. However, if your health history or family background indicates a shorter life expectancy, it's essential to weigh the benefits of early collection versus waiting.
Portfolio Growth: While delaying Social Security can result in a higher monthly benefit, it also means drawing more from your savings in the interim. By starting benefits early, you reduce the amount you need to withdraw from your portfolio, allowing it to continue growing. This strategy can be particularly beneficial if you plan to invest the Social Security funds, potentially pushing your breakeven age further into the future.
Age Gap with Spouse: For couples with a significant age difference, collecting Social Security early can be advantageous, especially for the younger spouse. If one partner has a considerably shorter life expectancy, it may not make sense for both individuals to wait until full retirement age or beyond. By starting benefits early, you can maximize your combined income while still considering potential survivor benefits down the line.
Unlocking Family Benefits: Early collection may also unlock additional benefits for dependent children or spouses. In some cases, waiting too long to collect could mean forfeiting these benefits. By assessing your family's financial needs and eligibility for such benefits, you can make an informed decision about when to start collecting.
Immediate Financial Needs: Sometimes, life circumstances dictate the need for immediate income. If delaying Social Security means resorting to highinterest debt or other detrimental financial decisions, it may be more prudent to start benefits early. While this decision may result in a lower monthly payout, it could prevent further financial strain in the short term.
Ultimately, the decision of when to collect Social Security is deeply personal and should be based on a comprehensive evaluation of your individual circumstances.
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⏱Timestamps:⏱
0:00 Reconsidering deferring SS benefits
1:06 Life expectancy
2:33 Grow portfolio
4:19 Spousal age gap
7:11 Family benefit
8:17 Financial need
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