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Deciding When to Claim Social Security Isn’t a Guessing Game

The summation of a Bloomberg article that states that many Americans opt to receive Social Security benefits at the wrong time may be confusing: “Most retirees should wait longer to access their benefits, researchers find. Some should claim them sooner.”

Why does this advice seem to be contradictory? Because there is no one rule for claiming Social Security. It really depends on you and your situation.

You cannot guarantee you’ll live to 100 and beyond but if you have clear evidence that you may not live well into old age, perhaps you shouldn’t wait. If you are healthy and robust and think you will live well into old age, perhaps you should wait.

But it isn’t just a guessing game. There are other factors to consider, such as your marital status. And beyond that, if you are married, do you make more or less than your spouse?

The Bloomberg article discusses a study which found that participants’ decisions about when to start receiving social Security benefits seemed random. That might make you suspect that people just don’t know enough about Social Security and that it is an issue of financial literacy. And while there are people who do not realize that they are locking in a lower rate by taking benefits in their 60s, the study found that:

“…affluent and educated retirees are more likely to make a mistake than are poorer and less-educated ones. Rather, the problem is that the ideal claiming decision can be very difficult psychologically. Balancing your savings with Social Security means, in effect, betting on when you are going to die.” Something that undoubtedly makes people uncomfortable.

Rather than become preoccupied with the very end of life, why not ask as Fee-Only financial planner to help you find a way to maximize your Social Security benefits and other resources to make the most of your golden years?