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The Pro and Con About When You Should Take Social Security

Updated on March 24, 2014

It really depends on your personal and immediate situation. That is the easy answer, yet so true. If you are in need for whatever reason to apply for your monthly stipend (based on your life long work income) and cannot delay, then, you will. But, most opinions will tell you to delay because by delaying will reap you more money when you finally do apply for it. But, what if you are injured or sick or with a disability and cannot continue working? Since your SSI is based on the earnings you earned per year throughout your life, if you are unable to work, your SSI would only grow a little through yearly increases for cost of living. Maybe then, it is better just to sign up.

SSI begins at age 62. These are people born in the early 50's, were too young to be really impacted by Elvis, but idolized The Beatles in the 60's. They were the hippies and the start of the "Now Generation" or youth movement that continues today. They started the long hair, drugs, peace signs, rock music, muscle cars. Their motto then was, "Trust no one over 30". They helped end the Vietnam War. But, like all youth, they firmly thought they could stay forever young. That, they would always look as they did in their prime. Of course, time tends to change that facade.

Many boomers held off in collecting SSI until 65 or 70 yrs. old. This group was born in 1943, the year Paul McCartney was born. They were impacted by Elvis and early rock. They were less radical and rebellious than younger boomer groups. Wisdom states that you will greatly gain SSI if you wait. Yet, as we all know, death can happen at anytime, although, when you are in your prime, you tend to feel invincible to Time. But, how long you will live is a calculation SSI makes, based on averages.

SSI looks at lifetime earnings, what age SSI was began and the life expectancy. If you start when you are 65, SSI calculates your end will arrive age 84. But, what if they are wrong and you live to 95? In that case, you would be better to wait until age 70 to collect. Its just a gamble because nobody knows the future.

Yet, waiting until age 70, if you can, will provide an additional 8% a year for every year past your full retirement age (usually, 66-67 yrs.). How much more? Well, if you started SSI at age 62, you would get $12,500 per year. Waiting until 70 yrs. could yield closer to $35,000! But, are you able to do it? Your health has a lot to do with it. Most who have not managed their retirement portfolios well will not be able to wait and need the income NOW. Many feel, the future is uncertain and they might as well take it while they are alive.

How is your health? Do you feel like you did when you were 40? Healthy? Still working? Then, delay SSI. Retirement is fine but it can be boring and the feeling of being useless can come into play as time moves on. That is why many are still working! Even if it is only part-time and earning extra income. It helps them be active, vibrant. If you suffer poor health, cannot work, or just need income to survive, collect.

SSI calculates that a person 62 now will live to be 75, 97% of the time. Living until your 80 is given a 85% chance, even to age 85, there is a 65% chance. If you collect at age 63, you receive $1350 mo., age 66 - $1800 mo., and at age 70 - $2376 mo.

As you can see, you can double your income by simply waiting eight years. But, eight years between age 62 and 70 is far different than when you were 40-48, at least for some. As my mom use to say, "If you have your health, you have a million dollars". I never thought much about it when I was younger, but now, there is real wisdom in it as you age. Health care is so expensive. It can quickly wipe your savings out.

So, wait if you can, are healthy, and still can work.


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    • Hawaiian Scribe profile image

      Stephanie Launiu 3 years ago from Hawai'i

      Thanks for an interesting hub. Iʻm right at that fork in the road. I turn 62 later this year. Unfortunately, Iʻve known too many people who pass away before they collect SS and then nobody benefits from their life of hard work except the government. The death benefit is only $250 if you donʻt have minor children. In your example of the person who would collect $1350 at 62 and $2376 at 70, the 62 yr old would collect $129,600 in the 8 years before they turn 70. The 70 year old would have to collect for another 4 1/2 years before their annual benefit even adds up to the $129,600 they passed up. Iʻm still doing my research on it, but I think taking the early retirement and combining it with freelance income is a very good way to go. Beware: if you continue working for an employer and take early SS, you may have your benefit cut if you earn over SS predetermined levels.