Should you take social security at 62?

Should you take social security at 62?  66? 70?

My top 10 thoughts

This is apparently the question of the day in my personal and professional world.  And since it came up recently with a Tamarac client, I thought I’d just throw out my 10 top thoughts.

First of all, there is no right answer.  Google the issue and you’ll get a different answer from each expert.  But here are some of the things to consider.

1. 66 is the full retirement age  Taking it before drastically reduces the payout.
   But what if you are a great investor?  Then you might consider taking it early.  Other reasons to take it at 62 is you may need the money during an unemployment period.  You can stop and start again when you go back to work. And of course, if you have real reason to believe you have a limited life expectancy, that can also be a factor.  And also, some people just feel a bird in the hand…..
2. Conversely, Suze Orman (who knows nothing about Medicaid, by the way) is a proponent for  70. And she’s also a proponent of working till 70. “Every year you wait between your normal retirement age and 70, Social Security will add a guaranteed 8 percent to your eventual monthly payout,” Orman writes in a recent feature for AARP The Magazine.  The difference in 62 and 70 is 32%
3. Bankrate says putting off getting social security as long as possible is the way to go.
4. Some experts say you should plan your retirement as if you didn’t have social security.  Remember the cost of living will go up much more than your benefits will. (approximately 2% per year.)
5. The IRS will tax your income if you are still working and social security is included in the computation
6. The Motley Fool has the break even point between 62 and 66  at approximately 78 years old.  That hasn’t changed since I started practicing law.  What has changed is the longevity that we can expect that did not exist a generation or two ago.
7. But what about the difference between 66 and 70? The break even point between age 66 and age 70 is about 86 years old.  A man reaching 65 years old today has a 20 year life expectancy. A woman has a 22 year life expectancy.
8. Remember:  Woman live longer than men and may have to depend on social security longer.  Waiting till 70 may make sense.
9. My 2 cents: Living into your nineties must be planned for.  You also must prepare for health care costs that are not covered by Medicare.  I see this every day.  People who came to me 20 + years ago who had  decent assets accumulated have spent them down, largely on medical and custodial care not prepared for.  They are running out of money. In fact this is a very typical fact pattern in my office
10. I just reviewed my finances with my accountant.  In looking over our expenditures, the first thing he said was “the Long Term Care Insurance…YOU gotta keep that!  Yes I do and yes I am.

Bonus:  Medicare comes at age 65 regardless of retirement age.  Your thoughts?  Email me at alice@florida-elderlaw.com about your choices and opinions.