When to take social security can be one of your most important decisions. A Social Security payment, guaranteed by the federal government to keep up with inflation and pay you for the rest of your life, is too important to take lightly.
I guess it is human nature, but most want to begin receiving payments as soon as possible. However, payments can increase significantly the longer you delay receipt (up to age 70). Since we fortunately do not know the date of our death, it is impossible to know the “correct” time to begin receiving payments. I think the excuse that Social Security will no longer be available is not very valid. The government reports that they receive in the form of payroll withholdings 75% of the current outflows. The system should not go “broke” with no payments being made. And possible changes to improve the financial stability of the program are not that great. Consider the following story as reported by Patricia L Burris in Financial Planning magazine. Though absolutely no judgment is made here, the following is an example of somebody who would not be impacted if changes were made to their Social Security eligibility.
In 2015, Billy Joel, age 66, and his 33-year-old bride were blessed with a baby girl. It is a fair assumption that Mr. Joel was eligible to receive the maximum 2015 Social Security payment-$2,685 per month. Under current law, his daughter (as a dependent) was eligible for $1,342 per month until she reached age 18. This amount will increase due to inflation. One would think that neither Mr. Joel nor his daughter will be destitute without these payments. Full disclosure-I have no idea whether Billy Joel claimed the Social Security payments for himself or his daughter.
Even though there are fewer options available under the Social Security rules due to recent rule changes, the lifetime effect of decisions can be significant. The rules are complicated. I rely on software to help me navigate the complicated bureaucracy. If you have reached the age to qualify for this government program, we can help. As mentioned, there is no “right answer” but we can guide in the making of an informed decision.