There’s so much conflicting advice out there when it comes to this topic. If you’ve got questions or you just want to talk to someone live, click on the link at the end of this post and I’d be glad to talk about your specific situation and ideas for social security. 

If you’re thinking about claiming social security before your full retirement age, here are three things that could hurt you, that you might want to pay attention to. 

Number One

You plan to continue to work before your full retirement age. Currently in 2020, if you make more than about $18,000 per year in wages, and you receive social security, that social security benefit could be reduced. They might deduct as much as $1 for every $2 you earn above that $18,000 limit. So if you plan on earning an income either from work or from self-employment before your full retirement age, think twice about claiming early. 

Number Two

You don’t have a lot in retirement savings. The average earner typically receives about 40% of their former wage from social security, but it’s common for retirees to need about 80-90% of their previous income just to live comfortably. Those with savings can supplement that extra need. But if you don’t have that option, then it might be a mistake to claim early because it’s going to permanently reduce that benefit that you could receive. 

Number Three

You have a chance at living a long life – hopefully you do. And if you anticipate living a long life, then it may not make sense to cut your social security benefit by claiming it early at 62. Because when you do that, you permanently reduce the monthly benefit. 

As an example, the percentage reduction is about 30% if you were to take it early at 62 versus waiting for full retirement age. So this means if you’re entitled to about $1,500 per month from social security at full retirement age, then that might just mean you’re getting just a thousand bucks per month at age 62. 

In some cases, filing for benefits early is a smart move and it can make a lot of sense. But if any of the above scenarios that I just mentioned apply to you, then you might want to be thinking about waiting instead. And if you’d like to talk about social security or retirement income planning, then click on the link here or reach out to me and I’d be glad to have a free meeting with you or give you a free copy of The Perfect Retirement Plan so that you can start to evaluate some of these things yourself.