Your Social Security Start Date

Most Boomers will qualify to start drawing on their Social Security at the age of 62 although currently, for many individuals, the full retirement age is 66. The extra income generated by the decision to do so can make earlier retirement easier. But is this the right decision to make? This short-term income benefit comes at a high long-term price. Why?

Because monthly benefits are reduced by 20% for workers and 25% for non-working spouses when compared to starting at age 66 (varies upon date of birth).

So, when is the best time to start drawing on Social Security? Many variables can weigh in on the decision as to when to start. One of them is the Boomer’s health, lifestyle and potential to live to a very old age. The longer one expects to live, the more “starting early” may ultimately cost them.

Another variable is the “break-even point” between starting at 62 and starting at full retirement age. An early retirement monthly benefit amount reflects a permanent reduction in the normal retirement monthly benefit amount. If an individual lives long enough, a larger monthly normal retirement benefit will catch up with the smaller monthly retirement benefit. The point where the total benefits are equal is known as the “break-even point.” The determination of this point can help inform the optimal Social Security benefit start date.