When Should You Take Social Security?

Most baby boomers are at or fast approaching retirement age and the question is should I be taking Social Security?  The answer is somewhat complicated.and depends on a few factors.

• How long do you expect to live?
• How much do you need the money?
• What retirement savings do you have?
• Does your spouse work and has income?

Without knowing the above questions, its difficult to come up with an exact age to take Social Security benefits. However, I can provide you statistics on the age distribution that men and women take Social Security benefits as of 2016.

Age - Men.......% Taken............Age-Women......% Taken
      62.................42%.....................62...................48%
      63..................7%......................63....................8%
      64..................7%......................64....................8%
 65-66................34%..................65-66.................27%
 67-69.................7%...................67-69..................6%
      70..................7%......................70....................4%

Almost half of all people take Social Security at 62 years of age and suffer from reduced benefits of between 25% and 33%, depending on the retirement date.  Interestingly, few people wait to 70 to take the maximum Social Security benefits, despite the fact that you get a 8% increase in the benefit for every year you delay taking it which could add up to a 32% increase between 66 and 70 years of age.

The average Social Security benefit is $1,310 per month and the maximum, assuming you worked 35 years and waiting to age 70 to claim benefits is $3,538 per month.

 Since most educators make over the Social Security threshold of $34,000, when you include the pension and TDA, expect to pay taxes of up to 85% on your Social Security benefits.  This means that if you are in the 20% Federal tax bracket, then 85 cents of every dollar you receive from Social Security will be taxed as income at the 20% Federal tax rate.

If you reach full retirement age, usually 66 years of age for the older baby boomers and up to 67 years of age if your generation X, you can make as much money as you like and not have any reduction in your Social Security check.  However, if you take Social Security benefits and are still younger than your full retirement age, you will have your Social Security check reduced by $1 for every $2 you receive over $16,920.

What age should you take Social Security?  That depends on you. Please feel free to read my blog on Social Security and New York City educators.

Note:  If you still owe a college loan or alimony.  The government has the right to garnish your Social Security check, even if you're on disability.