Great information to know prior to making a decision on Social Security. There are many options to consider. Once you make a choice is may not be reversible, so be careful.

If you aren’t now collecting and wait until 70 to collect your retirement benefit, your retirement benefit starting at 70 can be as much as 76 percent higher than your age-62 retirement benefit, adjusted for inflation.  The reason is that your benefit is not reduced due to Social Security’s Early Retirement Reduction; moreover, it’s increased due to Social Security’s Delayed Retirement Credit.  For many people, the increase in the retirement benefit can be even higher if they continue to earn money after age 62 thanks to Social Security’s Re-computation of Benefits.

3.  But if you are married or divorced, waiting to collect your retirement benefit may be the wrong move.  If you are the low-earning spouse, it may be better to take your retirement benefit starting at age 62 and then switch to the spousal benefit you can collect on your current or ex-spouse’s account starting at your full retirement age. But beware of the Gottcha in item 5. 

4.  If you’re married, you or your spouse, but not both, can receive spousal benefits after reaching full retirement age while deferring taking your retirement benefits and, thereby, letting them grow.  This may require having one spouse file for retirement benefits, but suspend their collection.  This is called the File and Suspend strategy.

5.  Be careful! If you take your own retirement benefit early and are below full retirement age, you will be forced to take your spousal benefit early and at a permanently reduced level if your spouse collects his/her his/her retirement benefit before or in the month in which you apply to collect your retirement benefit.  If your spouse is not collecting a retirement benefit when you apply for an early retirement benefit, you will not  be deemed to be applying for your spousal benefit.  Hence, you can start collecting your spousal benefit later with less or no reduction.

This just a sample of the strategies available to you when considering when to begin collecting social security. The best advice is to seek the guidance of an financial professional, preferably one who agrees to act as a fiduciary.

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