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A good case for taking Social Security benefits early

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    When should you file for Social Security if you have a young child?

    This is a q&a discussion that I thought brings up a very good point about a way to look at taking SS benefits early, as opposed to full retirement age.

    One quote from the article that I think stands out is:

    Realistically, money earned today is worth more than money earned in the future.


    This discussion is about a woman wondering if her husband (64) should retire at 66 or 70, and how the math works out. She is 46 and they have an 8 year old. She was also wondering about the offsetting benefits for their daughter.

    The ultimate advice was to take the benefits early. But the finer details were to basically sit down and do the math, and try your best to assume all the variables, like how much will your husband earn either way, if he were to live to say, 90. And how much would your child benefit now vs waiting, etc etc.

    Makes me think even more now that taking benefits early is a more viable path over full retirement IF you find yourself in a situation like this one. Definitely recommend reading the article.

    Also, anyone here considering early vs full retirement age that is in a similar situation? What's your take on this?

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    I'd say take the money and run. One of the reasons the government keeps bumping the age requirement up is that they are not only trying to deal with the heavy influx of the boomers retiring at the moment, but also to discourage those who want to take it early. Like the quote says, money earned today is worth more than earned in the future. If you think about it, you're quite literally gambling with money owed to you. What says you'll reach 90. Even with social security, the whole idea about "being in the present" might actually apply now.
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    I'm actually of the opposing opinion, especially if you're financially able to wait until you reach your full retirement age (which is dependent on the year you are born.)

    If you begin drawing your benefits the first day you're able to then your monthly benefit is reduced by 30%, with the percentage dropping each year thereafter until you reach full retirement age. That winds up being a whole lot of money in the long run.

    I stress that this may not be possible for everyone for a myriad of reasons, but I'm of the belief that the longer you wait to begin collecting your Social Security benefits the better.

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    JaredS Wrote:

    I'm actually of the opposing opinion, especially if you're financially able to wait until you reach your full retirement age (which is dependent on the year you are born.)

    If you begin drawing your benefits the first day you're able to then your monthly benefit is reduced by 30%, with the percentage dropping each year thereafter until you reach full retirement age. That winds up being a whole lot of money in the long run.

    I stress that this may not be possible for everyone for a myriad of reasons, but I'm of the belief that the longer you wait to begin collecting your Social Security benefits the better.

    Yeah, you're probably right to make the financial bet that you WILL live long enough to make the math make sense. What it boils down to: is taking it yearly, say at 66 instead of 70.. so that's 4 full years of reduced monthly benefits + forever reduced benefits.. compared to not getting any for those 4 years and getting full benefits thereon.

    What is the year that the math works out to where you start to eclipse those 4 years of waiting? Is it mid 80's? That's the whole argument really, unless you need the money now. If you can afford to wait, you are assuming you live long enough to surpass that age.