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Social Security: When Is the Best Time to Start Collecting?

One of the hottest financial planning topics is Social Security planning. The strategy of filing and collecting at age 62 may seem simple, and when income is needed, can be a good one. However, as we all have paid into the system, it makes good financial sense to understand your options and to choose a strategy that is right for you. What if you collected a spousal benefit in order to let your own grow to the maximum allowable amount? For divorcees: what if you collected your ex-spousal benefit and let your own grow? What options do married couples have?

Our Personal Bankers have the capability to help you plan for different Social Security filing scenarios. We can also estimate how much more household income would result. Read on for some Social Security basics, but we do encourage you to contact us for an appointment. Access to CNB’s Personal Banking team is free of charge- just our way of saying thank you for your valuable banking relationship!

Should I collect Social Security benefits at age 62, or should I wait until full retirement age?

Keep in mind that if you collect Social Security before your full retirement age, your benefit will be permanently reduced throughout. Depending on the year you were born, this amounts to receiving between 25 and 30 percent less per month if you collect benefits at age 62 versus waiting until “full retirement age” to begin collecting benefits. However, this doesn't necessarily mean that collecting benefits at age 62 is unwise. If your life expectancy is short, for example, you may actually end up with more money if you start collecting Social Security benefits at age 62. If we only had a crystal ball! Hence, the benefit of weighing your options!

There are also good reasons to wait until full retirement age (or beyond) to start collecting benefits. For example, if you work full-time past age 62, you may have the opportunity to increase your eventual retirement benefit, particularly if you are in your peak earnings years, as your benefit will be figured using your 35 highest earnings years.

Additionally, if at retirement your income will be restricted, you may want to receive as much as possible from Social Security each month at that point; waiting may be worthwhile for you. If you can wait past full retirement age to begin collecting benefits, you will receive delayed retirement credits (up until age 70) that will permanently increase your benefit. At this time, for each year you delay starting benefits beyond age 66, 8% of your full-retirement-age benefit is added to your payment.

Points to consider include whether other people will be eligible to receive benefits based on your work record, your eligibility for Medicare, your estimated life expectancy, and tax implications. The Social Security Administration (SSA) has several online benefit estimators available at You can also contact myself or any member of the Personal Banking team; we are able to guide your decision to file or wait.

©2016 Broadridge Investor Communication Solutions, Inc. All rights reserved. This material provided by William J. Boyle.

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