Special Situations to Consider Before Starting Social Security

It makes financial sense to wait to collect your Social Security benefits until you hit full retirement age: 66 if you were born between 1943 and 1954 and as old as 67 if you were born after 1959.

Your Social Security benefits will shrink if you begin collecting them before you hit full retirement age. According to the Social Security Administration, if you are the main wage earner and begin taking payments at 62 — the earliest age that you can begin collecting — you will receive just 75 percent of the benefit that you’ll receive if you wait until full retirement age.

This can add up. However, there are times when retiring early — and collecting those monthly Social Security checks before you hit full retirement age — is actually the right decision.

I cannot work: Maybe you’d like to continue working until full retirement age. Unfortunately, events have conspired against you. Maybe your health is bad, and you can no longer handle the strain of working. Maybe you lost your job, and you have not been able to find replacement work.

In such cases, it might make sense to begin drawing your Social Security benefits before you reach your full retirement age. Taking a smaller Social Security benefit each month is a better alternative than is running up credit card debt or facing the possibility of losing your home to foreclosure.

My health is bad: This a rough estimate, but if you expect to live past 78, it makes more sense to wait until you hit Social Security full retirement age. If you do not think you’ll live to 78, it makes sense to take your Social Security payments as early as possible.

Of course, you cannot predict how long you’ll live. However, if you are in poor health already, or are suffering from a potentially life-threatening disease, your odds of living past 78 are lower. It might be time to consider taking your Social Security benefits earlier.

I am married and my spouse is ready to start collecting: Even if you have not reached full retirement age, it is considered smart for married couples to begin taking their Social Security benefits at the same time. If your spouse passes away before you, you can choose either to receive your Social Security benefits or your spouse’s, whichever is higher.

Your spouse has passed away: If you are a surviving spouse, you can either claim your own Social Security benefits or those awarded to your deceased partner. You’ll obviously take the payment that is higher. If you take your spouse’s benefits, though, before you reach full retirement age, these benefits will be reduced permanently. It might not make financial sense, though, to wait until you reach retirement age. For instance, if you’ll struggle to pay your household bills without the benefits of your deceased spouse, you should begin taking your benefits as soon as possible.