The Great Social Security Debate

Do I take it now or wait until I'm older?

This debate has been ongoing. Everyone seems to say that if you don't need the money, you should wait because your benefit will be more. On the other hand, I know of 3 fairly intelligent (okay, one I'm not so sure about) people that are opting to take it right away at age 62. In fact, one told me, "Barb, do the math!" So, I did just that.

In the mean time, I thought I would share with you my basic math. Granted, I'm not eligible for much---although I'm told that in reality, I can draw half of my husband's benefit without it adversely affecting his. That sounds too good to be true, so Butch is going to find out about that.

Now remember, I've been a SAHM for most of my married life, so I joke about how paltry my benefit  is. Last time I got a statement, I think it showed I would get about 29 bucks a month. So for ease of calculation, I just figured it on $50 a month at age 66 when you are eligible to get 100% of your benefit.

If you take your social security benefits at age 62, there is a 25% penalty. If you wait until age 70, you get 132% of your benefit. The penalty for taking it early---from 62 to 66 is the same. So if you plan to take it early, you might as well start right away at 62.

Let's do the math to age 74.
$50 with a 25% penalty = $37.50 x 12 months = $450 x 12 years to age 74 = $5,400
$50 with 132% benefit = $116.00 x 12 months = $1392 x 4 years to age 74 = $5,568

Thereafter, you get $1392 a month compared to $450---that's triple the benefit by waiting just 8 years longer!

Once you reach age 74, you are ahead of the game if you wait. So there's the gamble. If you think you'll live past 74, then you should definitely wait to start drawing until the age of 70. As Connie always says, "if only we had a crystal ball!" Also, if you plan to continue working, you might as well wait as you are only allowed to earn so much before it affects your benefits.

Aren't you glad I cleared that up? You're welcome!