When should you collect social security benefits?

As we referenced earlier, there are no absolutes, and circumstances do exist in which it certainly does not pay to collect early. In the event that you are still working, you want to delay benefits until at least your full retirement age in order to avoid penalties that would negate a substantial portion of the income, if not all of it.

If you and your spouse are in a position where you have not saved an adequate amount of money to support your lifestyle and you are likely to run out of money no matter what you do, it likely pays to delay the benefit as long as possible since you will not have investment capital to produce any compounded growth. If you are essentially running out of liquid assets anyway, you are likely spending all of the SS benefit every month, and no wealth is accumulated no matter what happens. Therefore, the larger lifetime payment makes sense. If you died well before your average life expectancy, you never reached your breakeven point. But either way there is no legacy of assets left to heirs.

Each situation must be examined independently in order to make an educated decision. However, it is wise to be cautious of software programs, or any form of advice that measures only the metrics of the SS benefits formula without accounting for all the other moving parts that make up your personal financial profile.

Joe Favorito

Joe Favorito

Joseph Favorito is a Certified Financial Planner™ who began his career in the financial services field in 1997. Over the past two decades Joseph has worked for several New York stock exchange members. In 2011 he founded Landmark Wealth Management, LLC , a Long Island-based Securities Exchange Commission registered investment advisory firm.

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