Many people believe that there is a magic age or a magic time when you should begin taking social security. When it comes time for you and your spouse to begin taking social security the best option is …… Well it depends.
- If you believe that Social Security will go away and it’s a big Ponzi scheme and the world is coming to an end, then the best time to begin taking your benefits is right away.
- If delaying your benefits will cause you an ability to not be able to pay your bills, then the best time to begin taking our benefits is right away.
- If you are dead set at starting to take your benefit no matter what, then the best time to take your benefits is right away.
The problem when making any of these decisions is that if you make a mistake, it will actually carry on forever and ever.
However, if you want to optimize the amount of you and your spouse’s future benefits then you need to plan. The math and science will tell you that you wait the longest you can. Which is 70 years old, for the one with the highest benefits.
But there is actually more to take into consideration. It also may depend on where your assets are; how will we make up the difference without collecting our benefits; will we be taking advantage of converting our taxable income to tax free; or what about our taxes if we begin collecting our Social Security.
Most importantly for me is what about your spouse? At death, your spouse does not get to keep receiving both benefits. They only get to collect on the higher benefit. So with all the above variables, this is a big deal.
The other concern for most couples, is that this will be a large income source. We want to make sure that we are able to take the most amount of income for the longest time.
Understanding that how long you live will also determine how much you receive, the longer I am in business the more longevity and future income needs become an issue. You might think now that “well the difference between this age and that age is $80 or $100 dollars” no big deal. I will guarantee that 10, 15, or 20 years from now, that difference that seemed small, will be huge in the future.
So make sure you get it right the first time.