The fact that you get a choice on when to claim Social Security can be a good thing as well as a bad one. On a positive note, you have the power to score a higher monthly benefit for life. The flipside, though, is that you might really struggle to make that decision, to the point where you continue to question yourself during retirement.
If you file for Social Security at full retirement age (which is 66, 67, or somewhere in between, depending on your year of birth), you'll get your full monthly benefit based on your earnings history without any reduction or boost. If you sign up before full retirement age -- you can do beginning at age 62 -- you'll be looking at reduced benefit, but you'll get your money sooner. And if you delay your filing past full retirement age, you'll score a higher monthly benefit (though you can't grow your benefit beyond age 70).
There's no denying the fact that your approach to claiming Social Security could have major consequences that last throughout your senior years. But if you're having a hard time landing on a filing age, tackling one difficult but important question could be your ticket to coming up with the right answer.
How long do you think you'll live?
None of us have access to a crystal ball (or at least an accurate one), so to some degree, there's no such thing as predicting our own life expectancies. But we can make educated guesses based on the things we do know.
There's always the possibility of falling victim to an accident or illness and passing away at a relatively young age. But barring that, there are two factors that will likely play a role in your life expectancy:
- Your health going into retirement
- Your family's longevity history
If your health is excellent, there's a good chance you'll live longer than someone who enters retirement in poor health -- especially if you happen to have a family history of living longer lives. If that's the case, then claiming Social Security at a later age could make sense. Going that route could result in not only a higher monthly benefit, but also, a higher lifetime benefit.
On the other hand, if your health isn't in good shape as retirement nears, and you don't have a particularly strong family history of longevity, then you may want to claim Social Security early. Doing so might slash your income on a monthly basis. But you might also end up collecting more total income from Social Security in your lifetime.
What's the right call?
Social Security could end up playing an important role in your retirement finances, so it's important to put a lot of thought into your decision -- and that could involve contemplating your own mortality. Clearly, that's not a very pleasant or comfortable thing to do. But it's an essential exercise to take on if you want to increase your chances of landing on a filing age you don't wind up regretting.