All our lives, retirement has been something on the distant horizon, something that happens to other people, then BAM! all of a sudden it’s here and it’s our turn. When to begin taking social security benefits is a question that hits all of us as we get closer to retirement age.
There’s no single correct answer to when you should start collecting social security. Readiness for retirement is an attitude, and of course a financial decision. You can’t very well leave your job early if you need the steady paycheck for a few more years. Then again, there’s no reason for you to stick around the job if you’re ready and can manage the finances. When you look closely at your own circumstances, you’ll know the answer.
Retirement doesn’t mean you stop, retirement means you can change your focus. Think about it for a moment. When the rat race is done, you have the chance to do things you’ve always wanted to do but couldn’t because of obligations and such.
If you’re ready early, if your mortgage is paid and your expenses are lower. You can finally tap into your retirement savings without penalty, so social security may be all you need to fill the gap.
You won’t lose any benefits if you retire early, that is, unless you make it past 78. Sure, your monthly benefits will always be lower, but then again you’ll be collecting monthly checks longer.
Maybe you’re not ready to leave your job cold turkey. If you can manage it, you could cut way back and work part time and not lose any benefits. You can earn almost $250 a week before it cuts into your benefits. Staying on part time could mean keeping all or part of your health insurance. This is something to consider because you won’t be eligible for Medicare until you hit 65, and getting your own coverage gets expensive.
If you really enjoy working and your employer wants you to stick around when you reach your normal retirement age, you can collect and continue working because your earnings won’t affect your benefits at that point. Pay attention to the tax consequences though. You could end up sending most of your benefits back to the government in income taxes if your income is high enough.
In that case, it’s better to wait until you’re 70 to begin collecting social security. You’ll accumulate credits and your monthly benefits will be that much larger when you do begin collecting.
When you start taking your social security benefits is entirely up to you and your circumstances. Early, normal or late aren’t better or worse, just different. You won’t lose out no matter which you choose. You can collect on your terms and that’s the best. Does retirement mean you’re being put out to pasture? Well, that is entirely up to you and your attitude. The grass is lush and it’s delicious.