When Should You File for Social Security?

​Retirement is a major turning point in life that is to be celebrated. It also brings many big life decisions. You may be facing decisions about how to best protect against health care costs or whether to downsize to a smaller home.

One of the most important decisions retirees face is when to file for Social Security benefits. Many retirees wrestle with whether to do it sooner or later. Either way is a viable option, and each has its benefits and drawbacks. It may be tempting to file as soon as you’re eligible so you can access your stream of guaranteed* income. On the other hand, you may want to wait so you can increase the amount of your benefit.
 
Always keep in mind that, once you file for Social Security, your decision is final. Think about your individual goals and needs before making your decision. Having a firm grasp on a few basic factors will help you utilize Social Security to its fullest potential.

Need
This is a very simple but important consideration. Ask yourself if you really need the money. Certainly, if you’re in a dire situation and have no other source of income, it makes sense to file for benefits as soon as possible. Without any other sources of income, filing early could be your only viable solution.
 
If you can avoid filing for Social Security until after you reach full retirement age, however, you could see increased benefit payments once you do file. In fact, the Social Security Administration offers an 8 percent increase in benefits for every year past your full retirement age that you delay filing. For example, if your full retirement age is 66 and you wait until you’re age 70 to file, you’ll get a 32 percent increase in your benefit.1

Health
Your state of health could be another important factor in deciding when to file for Social Security. It’s certain that filing later leads to higher benefits. If you could use the money to cover medical costs, however, or if you simply don’t believe you will live long into your 70s, it might be wise to file early.

Perhaps you have been diagnosed with a condition that you know will limit your life expectancy. You may also think you won’t live long because your parents or grandparents died early in retirement. Be careful with that assumption, though. With the recent advancements in medical science, it’s not uncommon for people to live longer than their parents and grandparents. If you’re in relatively good health upon retirement, it might be beneficial to delay filing for a few years.

Spousal Benefit
 Many retired couples utilize what are called spousal benefits. These benefits apply to married individuals who’ve earned significantly less than their partner. This type of benefit can be an important tool to maximize your retirement income.
 
If you’re eligible for spousal benefits, you could start collecting your individual benefits right away while your spouse delays filing. Then, once your spouse files, you can switch to the spousal benefit. If you and your spouse are interested in taking full advantage of your Social Security benefits, you may want to consider contacting a financial professional.
 
Ready to plan your Social Security strategy? Contact your financial professional to help you analyze your needs and develop a strategy.

1https://www.ssa.gov/planners/retire/1943-delay.html

*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.

The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov

This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice.

16440 - 2017/2/15