The Pros And Cons Of Filing For Social Security At Full Retirement Age

Each person is different when it comes to the logic of claiming social security benefits and at which age they should do so. For many it makes perfect sense to claim those benefits as soon as they are entitled to them – for others waiting a while might be the most financially sensible thing to do – it all depends on individual circumstances.

There is a window for claiming these benefits. People are entitled to claim benefits which are calculated on their earnings during their career when they reach the age of 62, however the window to claim those benefits is eight years.

To complicate matters retirement age depends on the year of birth of the person applying for the benefits. For instance those born between 1943 and 1954 the retirement age is 66, while those born in 1955 the retirement age is 66 and two months – with the retirement age steadily increasing in monthly increments until 1960 when the retirement age is set at 67 years old.

So does it make sense to claim immediately or wait for a period of up to eight years to claim?

Here are the pros and cons for each approach.

If you have not saved significant amounts during the course of your career then it makes sense to wait for as long possible to collect your social security benefits. Although you could collect up to five years prior to your official retirement age you will incur significant penalties for doing so. In fact those penalties can reduce your payments by around 30% if you claim them at 62 when your full retirement age is 67. For those who do not have a lot of money in the bank that is a penalty that is not easy to bear.

Quality Of Life After Retirement

It’s also worth noting that increasing levels of healthcare and supporting services mean that many people are living longer than ever – and are in fact enjoying careers that last far past the official retirement age. The longer you resist applying for social security payouts the longer there will be to build on savings and the better quality of life you will have once you do claim for your retirement benefits.

However, if you have managed to build significant savings then there may be a case to be made for taking those retirement benefits at the official retirement age – but it is still worth noting that applying for them before the official retirement age is not the most financially savvy thing to do – the penalties are just too steep.

Another exception to the rule that says that waiting is the correct approach is when the claimant is in ill health. If the claimant does not expect to live a long and healthy the money from social security may provide a better quality of life in their remaining years.

However as a general rule it is far better to delay claiming benefits for as long as possible.

All these factors need to be taken into account – but the best approach is to consult a professional financial adviser before making any decision on the matter. To Know more consult professionals now!

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