It's a common misconception that receiving your social security benefits at an earlier age will reduce the overall amount of your benefit over time. However, this isn't generally true. Because you will be taking it at a younger age, your monthly payment will be smaller than if you had waited, but the aggregate payout over time will be the same amount. To see how the numbers work out use the Social Security table or Social Security detailed calculator to understand how your monthly benefit payout amount differentiates depending on when you claim your benefits.
It is not always optimal, but there are some reasons to take your social security benefit early. Here are a few:
If the potential for program insolvency is causing you anxiety, then it may make sense to start taking benefits earlier than your full retirement age. A few dollars a month isn't worth the cost in all the lost sleep and hand-wringing that you will do.
Another reason to take your social security benefit early is if you believe your life expectancy has changed. While the longevity rate keeps increasing the more you age, it does not prevent the unfortunate diagnosis of a life-threatening disease. If your health has declined and you may not live out your statistical life expectancy, then it may be better to claim your benefit early. Claiming your benefit earlier can give you comfort financially, physically, and mentally.
If you are a married woman, and your husband has been the significant wage earner over time, you can make a case to start taking social security benefits as early as possible. Statistically, the wife will outlive the husband, and the spouses can share the wife’s early benefit as an income source. But if you take your benefit early, how long do you have to be married before receiving your deceased spouse’s increased benefit? The answer is, it depends. There are three types of benefits in this married spouse category: spousal, survivor, and divorced spouse. Each status has different qualification rules, and it can be complicated to decipher the best benefit available to you. It is crucial to check Social Security Administration benefits for spouses as well as a trusted professional to outline your best course of action.
Deciding when to take your social security benefits involves numerous factors. A balance has to be struck between the cost of living adjustments (COLA), current expenditures and expected longevity. But in the end, neither option will usually prove to be a disaster.