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Do Not Let the Fear of the Social Security Trust Fund Becoming Insolvent Make Your Social Security Decision - eTVnews.com
The looming insolvency of Social Security has become front-page news daily. However, do not let this fear determine when you should start your Social Security benefits. It is true that if Congress doesn’t take action soon, Social Security recipients could face a 22% cut to their monthly payments. But Social Security can never go bankrupt unless people quit working and paying into it.
If Social Security benefits are reduced, it will affect current and future beneficiaries. Just because you are receiving your benefits does not mean they will not be reduced; they will just be reduced even more. With the current full retirement age (FRA) of 67, starting your Social Security at age 62 results in a 30% permanent reduction. Not that I believe this will happen; I truly believe a bipartisan Congress will agree on a way to keep it solvent, just like a bipartisan Congress did back in 1983.
When deciding when to start your Social Security benefits, there are things you should take into consideration—your other retirement funds, 401 (k) s, pensions, savings, etc. How heavily dependent will you be on your Social Security benefits? If married, how heavily dependent will the surviving spouse be on only the highest benefit remaining, as the smaller benefit will end? Look at your family history to determine your life expectancy. Your Social Security benefit grows 76% between 62 and 70, regardless of your FRA. Of course, it also depends on if you need the money more now than later.
Savvy Senior published an article about this topic. To read the full article, click here…
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