When to Take Your Social Security Retirement Benefits?

Conventional wisdom touts the virtue of delaying your social security retirement benefits as long as possible. It also told us to hang on to our stocks. In this economy, if you are nearing age 62 and out of work, social security early retirement may be the closest to a golden parachute you will get. If taking your social security benefits early means staying in your home and maintaining a sense of dignity, that’s what FDR designed it for. (Of course in his day most people died at 63 but that is another story.)

If you are lucky enough to be gainfully employed it may still make sense to delay your benefits until age 70 and boost your monthly take. But, if you are among the increasing number of out of work Boomers with limited prospects for finding work, it is time to rethink retirement.

Truth be told, taking your social security retirement benefits early or late amounts to about the same thing. If you take your benefits early, your monthly amount is reduced a fraction of a percent for each month before you reach full retirement age (66 If you were born between 1943 and 1954). But since you will receive payments over a longer period of time, it comes out about equal.

Taking your benefits doesn’t preclude working. You can earn $14,160 a year and keep all your benefits. After that your benefits will be withheld one dollar for every two dollars in earnings. Once you reach full retirement age, there is no earnings limit.

Don’t despair that choosing this option means giving up your dreams of ever making it big. If you should land a high paying job or manage to turn a little retirement business into a gold mine, great! The benefits withheld because of your higher earnings will count towards a larger return in the end.

So if you decide to retire earlier than expected what next? For insight and ideas on pursuing a self-directed lifestyle explore the rest of this site.