Deciding the timeline for Social Security withdrawal relies significantly on your existing circumstances. Depending on your work history, you can collect the Social Security benefits at 62 years or even earlier if you have a disability. You can also wait until you attain the full retirement age, or 70 years, to enjoy the long-term benefits. There is no right or wrong claiming age, so how do you decide based on your own unique situation? In this Social Security guide, we’ll shed some light on requirements, benefits, and other implications that can affect your social security outcomes.
When Should You Withdraw Social Security Benefits?
Cash Requirements
Suppose you plan to retire early and have adequate resources, like a traditional pension, an investment profile, and other sources of income. In that case, you can withdraw the Social Security benefits as required. You have no choice if you need Social Security benefits to meet your ends. Postponing retirement or working till attaining full retirement age maximizes the benefits.
Life Expectancy
Withdrawing Social Security earlier will decrease the benefits, but you will continue receiving monthly payments for a prolonged period. However, withdrawing it later leads to fewer checks, but the amount is more. If you don’t suffer from complex health issues and believe in surpassing the average life expectancy, delaying the withdrawal is excellent for higher payouts. On the other hand, if you have a shorter life expectancy or health issues, the Social Security guide suggests early withdrawals are better.
Marital Status
If you are married and your spouse earns more, you should consider their health, age, and benefits. For instance, after full retirement, you can pick 100% of your Social Security benefits or half (50%) of your spouse’s, whichever is more. As a divorcee (married for 10 years or more), you can receive your ex-spouse’s Social Security benefits, amounting to almost half of the retirement benefits. It doesn’t affect your or your existing spouse’s Social Security benefits.
Employment Status
Your self-employment income or wage earning can temporarily reduce the benefit if you collect the Social Security amount early. If you have not completed your retirement stage, $1 in the Social Security benefits gets deducted for every $2 you make above the yearly limit. The year you reach your full retirement age, there is a reduction in the deduction amounting to $1 Social Security benefits for every $3 you earn above the higher yearly income. The month you attain your retirement, your Social Security benefits remain intact, irrespective of your earnings.
When to Withdraw Social Security Early?
- You don’t work and fail to cater to your needs without Social Security benefits.
- You have health issues and don’t expect to survive the average life expectancy.
- You are the lower-earning spouse, and your higher-earning spouse can delay enjoyment.
When to Delay Withdrawing Social Security Benefits?
According to the social security guide, you can consider delaying withdrawing the benefits if:
- You are a working employee and can influence the taxability of Social Security benefits.
- You and your spouse have good health and believe in surpassing the average life expectancy.
- You are the higher-earning spouse and want your current spouse to receive the maximum possible Social Security benefits.
Are Kids Eligible to Inherit the Benefits?
Apart from the spouse, dependent kids and grandkids are eligible to receive Social Security benefits when you retire, die, or become handicapped/disabled. To become eligible, your dependent kids or grandkids should cater to requirements like:
- Being 18 years or under
- Under 19 years old and attending full-time school
- Unmarried
- Disability before the age of 22
The payments for Social Security benefits for minors are nullified after they turn 18. The Social Security benefits end for students when they graduate or two months after their 19th birthday, whichever arrives first. Eligible disabled kids and grandkids continue receiving the benefits until they marry. The rules and regulations in the Social Security memorandum are complex for disabled dependents. It is wise to consult a benefits specialist or expert at the SSA (Social Security Administration).
Conclusion
Everybody experiences different circumstances in life. When determining whether to delay or withdraw the Social Security benefits, you should understand and apply the basic rules and policies mentioned in the Social Security guide. The Social Security guide helps to maximize the benefits.