How to Handle Six Money Dilemmas, Take Social Security Early OR Late

Money magazine lists six money dilemmas and what to do about them. This is the last one of the group I've been posting on the last few days. Here goes:

Dilemma #6: Take Social Security early OR late

Money's suggestion: If you're healthy and don't need the cash, wait.

My take: This is a long way off for me, and I'm counting on absolutely nothing from Social Security as I save for retirement.

That said, I think at this point we'd take advantage of the hybrid Social Security strategy for couples. And if it ends up that this won't work, I think we'd wait to take Social Security. We won't need the money, so we'd be willing to bet on the fact that we'd live longer and get more benefits in the long run.

FMF posts related to this topic: An Interesting Strategy for Taking Your Social Security Benefits, When to Take Social Security

What's your take on this issue?

Comments

[carol]

There are a number of factors that go into makiing the decisiion about when to take Social Security. Let me just begin by saying Social Security will be there--over 70 million baby boomers won't let it disappear. Sometimes just taking less Social Security is worth jumping ship early if you have other work plans. I feel that I would rather have a smaller S.S. check then staying an extra year or two in a very stressful, time-consuming job. We are more than money.

[Compounding]

Actually, if you take early distributions and save them until you reach the age you could have taken full distributions, you should be able to more than make up for the difference with the returns on the early distributions. Plus, you will have a lump sum of cash at your disposal, and something you could leave behind... something that you cannot do with Social Security if you take full distributions.

[Lord]

Depends on the returns you get. Social Security offers 4% real or 7% nominal for delaying. Only equities can do better for an average investor, but they can do better. Longer living is the best reason to delay.