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Should you start Social Security benefits early?

(MoneyWatch) I've often written about the financial advantages of delaying your Social Security benefits. One recent post in this vein drew a number of comments and emails from readers who disagreed with my conclusions and who outlined their reasons for starting to collect federal retirement income as soon as possible.

Nationwide, half of all Americans start their Social Security benefits at age 62, the earliest age of eligibility, and three-quarters start benefits before the "Full Retirement Age" (age 66). What should you do? My answer: Take into account both the financial arguments regarding Social Security and your lifestyle considerations, given your unique circumstances. If you understand the rationale for delaying the start of benefits, but your lifestyle considerations trump these factors, then you've made a conscious choice that I respect.

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Here are some life circumstances and lifestyle considerations for which it makes sense to start your Social Security benefits early:

  • You (and your spouse if you're married) are in poor health and don't expect to reach the average age for life expectancy.
  • You need to start benefits as soon as possible in order to make ends meet, due to your inability to work for any reason, such as disability or lack of job opportunities.
  • You want to exit the workforce as soon as possible to enjoy life now, and you believe that you won't be able to do that as much when you get older.
  • You have substantial financial resources, so when you start Social Security benefits doesn't really matter.

But before you decide to start your Social Security benefits early, let me recap my arguments for delaying benefits in a way that doesn't involve numbers:

  • If you're in average or above-average health, you'll most likely receive more income over your lifetime.
  • Having more money over your lifetime will reduce the odds that you'll need to be dependent on your kids or other relatives late in your life.
  • Death rates are correlated with income levels, so having more money over your lifetime might increase your life expectancy.
  • If you're married and the main breadwinner is the husband, then by delaying his benefit he can increase his wife's financial security if he dies first (which is statistically likely).
  • If you take care of your health, you'll most likely continue to enjoy life well into your 80s and 90s and will need as much income as possible, even if you aren't as active as you were in your 60s and 70s.

I acknowledge that there are some people who can't work a minute longer and need to start their benefits right away. But this doesn't describe the circumstances of the entire three-quarters of Americans who start their Social Security benefits before they reach the full retirement age.

I also challenge the assumption that work is automatically bad for you or otherwise demeaning, or that you can't enjoy life and work at the same time. It doesn't need to be the case that you need to stop working altogether as soon as you tap Social Security. I contend that it can be a good strategy to find enjoyable, part-time work that brings you social contacts, meaning in life, time to pursue your interests, and just enough money to replace the Social Security benefits that you're delaying. I know many people who are doing this, and I believe it's a realistic strategy for many people, though it's obviously not for everybody.

By the emotional tone of some of the comments I received on my recent post, you'd think that I'm casting judgment on people who start benefits early. This simply isn't the case -- it's your life, and I respect your decisions. I'm simply showing that delaying the start of Social Security income might be in a person's best financial interest, even though there could be legitimate reasons to start benefits early.

No matter what decisions you're making about your retirement, I encourage you to make conscious choices that weigh your financial and lifestyle considerations. Then move on to enjoy your life to the fullest extent possible.

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