If you take out your Social Security early, is benefit reduced permanently?
Freeman Owen: You talk about making errors. Some people who are eligible at age 62 take their benefits out early, and they think that maybe they should have postponed receiving benefits until full retirement, age 66. It seems that we have to point out that if you take your benefit at 62, there is a permanent reduction of approximately 25%. This even spills into the survivor benefit of 30%. Then we have those individuals who need their Social Security benefit to augment their income. As a matter of fact, about 46% of your retirement income comes from Social Security.
Is the Reduced Benefit permanent if you take your Social Security out Early?
David Melton: That is correct Freeman, as a general rule if they take out their benefit too early they are seeing a corresponding reduction for taking that benefit. Age 62 is the earliest they can file and receive the retirement benefit. For those individuals who have the full retirement age of 66, that retirement reduction is 25%.
In some of our publications we have information on understanding the benefits and when to start receiving benefits. When people file for Social Security they are making financial decisions that they lock into for the rest of their life. This affects not only the amount of benefits they will receive, but also the amount that survivors will receive.
When is the right time to file for Social Security?
There is no one “right” time. That is an individual’s decision. You want to look at the various factors that influence retirement decisions from the amount of Social Security, other income, life goals, healthcare etc. Factor all of those issues so that you know when is a good time to file. You want to be confident that you are making a good decision for you and your family.
Visit my website JustAskFreeman.com for more useful tips on how to get the most from your retirement planning & Social Security benefits. VA | MD | DC . Also, download my free “SAFE MONEY KIT” to get the most from your retirement dollars. Tel: 1-866-471-7233