When should I claim Social Security if I don’t need it?

When should I claim Social Security if I don’t need it? On this episode of A Wiser Retirement™, Casey Smith and Missie Beach, CFP®, CDFA® talk about the best age to claim Social Security, different strategies for claiming it, and the optimal time to take it if you don’t necessarily need it.

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Summary

Social Security Considerations

  • Longevity Expectations: Those with longer anticipated lifespans may benefit from delaying Social Security to maximize later-life income.
  • Investment Returns vs. Benefit Increase: Weigh the guaranteed 8% annual increase from delaying Social Security against potential investment returns.
  • Tax Implications: Higher income can make Social Security benefits taxable, so timing them with lower income years can be tax-efficient.
  • Legacy and Spousal Benefits: Delaying benefits can enhance the survivor benefits for spouses, which is crucial for married couples.

Social Security Strategic Approaches

  • Use Other Assets to Bridge Gaps: Leveraging other retirement savings can allow delaying Social Security benefits.
  • Consider the Full Financial Picture: Evaluate all assets, including investments and real estate, to decide the optimal time to claim benefits.
  • Flexibility in Retirement: Delaying benefits can provide more financial flexibility for unexpected expenses or lifestyle choices in later years.

Fears and Misconceptions About Social Security

Some people believe that the system will implode when the trust fund runs out in 2033. They explain that 75% of Social Security would still be funded at that time, and the remaining 25% could be addressed through various solutions such as means testing or increasing taxes. There is a calculator provided by the Foundation for the Budgeting and Prognostics that shows how these different solutions could work. Keep in mind that Social Security is an essential source of income for many seniors in America, so it won’t just go away in 2033, they will find a solution.

Links:

  • Calculator to solve Social Security
  • Click here to download one of our free guides that covers financial planning topics like retirement, investing, taxes, divorce, and more!

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