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When You Should File Early for Social Security

It’s fairly common advice spread by financial advisors and laymen alike: It’s always better to file for Social Security later rather than earlier. After all, if you delay receiving benefits for as long as you’re able, payments can go up significantly.

Chances are that the advantage of delaying taking benefits will apply (and appeal) to most people. But filing earlier (or as soon as one is eligible) can be the right choice for many people. Here are some situations when that may apply. (For more, see: 4 Unusual Ways to Boost Social Security Benefits.)

  • You want to retire now – or are unwillingly retired: Unless you have other forms of income, filing for Social Security is the only way you’ll survive without a steady job. If you’re laid off or find your job too difficult to maintain, it may be easier to retire and take your benefits early. While the spend-now/worry-about-it-later mentality is typically toxic when it comes to personal finance, it can be the only option for those struggling financially in older age. If you’ve a choice, try to wait until your full retirement age, usually 66 or 67 (click here to find yours). Taking it before then will lower your monthly benefit.

  • You’re in poor health: Although life expectancy continues to rise in this country, many seniors still worry about dying early. If you have a chronic condition or a terminal illness, you might consider taking your benefits early. “Delaying benefits doesn’t make sense if there is a good chance you won’t be around to enjoy it,” says CFP Jennifer Davis of Halpern Financial.

  • You have dependents: If you have children or other relatives who qualify as dependents on your tax return, they may be eligible for dependent benefits when you take your Social Security payouts. The math might work out in their – and your – favor. The details can be confusing for the layperson, so consult an advisor if you’re unsure.

  • You’re divorced or have a deceased spouse: Filing early can make financial sense for those who are divorced, but were married at least 10 years, as well as those who’ve lost a partner. The survivor benefits can be a great boon, especially for a single senior. Each person can claim one benefit (their own or their spouse’s) at a time and wait to take the other benefit later.

  • Your spouse can take benefits later: If you’re still married, you may only need to take one person’s Social Security benefits early. This strategy can give you some income immediately while the other person’s benefits continue to grow. Make sure to do the math with the official Social Security calculator.

  • You have no other assets: Social Security was never intended to be the sole support of your retirement years; for most folks, it is (or should be) a supplement to their income. But suppose a rampaging bear market has played havoc with your retirement accounts and plans? For example, the Great Recession of 2008 was a game-changer, erasing a decade’s worth of gains in many an investment portfolio. If continuing to work isn’t an option, it might be best to ensure an immediate steady income stream via your benefits.

The Bottom Line

The common advice still holds true for many, so don’t automatically assume that filing early for Social Security is a good idea. “It’s important to avoid the temptation to take Social Security early just because it’s available,” Davis says. “It may be the only steady source of income (that grows with the cost of living) an individual has.” If you’re not certain how applicable your situation is, consult an advisor. (For more, see: 5 Social Security Changes to Expect This Year)

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