• When is the right time to collect Social Security?

  • by Kristen Curzytek

In recent years there have been many discussions about Social Security running out and no longer being an option to seniors. The number of Americans opting to take Social Security at 62 (the youngest you can start collecting) is on the rise. In 2009, 42 percent of 62 year-olds claimed benefits, up from 38 percent in 2007, this according to economists in Washington, D.C.  So when is the right time to collect Social Security? Should you collect as early as possible or should you wait until you really need it?

First, let’s take a look at the fear of Social Security becoming a thing of the past. Most retirement planners and advisers blame law makers for putting fear in the minds of many seniors that Social Security will become a thing of the past. The fact is that if the system keeps working the way it is right now, by 2037 benefits could be reduced by 22 percent and could continue to decline if the system doesn’t change. But what law makers are saying is that if the program is not changed, it could end.

Although many economists are worried about more and more seniors are collecting Social Security early, many are not taking in account the current job market. Many seniors found themselves without a job after the recession or heading into retirement earlier than planned. Countless seniors found themselves without a job and not at their goal for their retirement nest egg. Many turned to Social Security to help get them by.

Another factor adding to the increase in seniors taking Social Security early is the rising costs of health care.  According to the Census Bureau an individual over the age of 65 spends 15 percent of all spending on healthcare. The average out-of-pocket expenses total more than $400 a month. These growing medical costs make taking Social Security an easier decision for many seniors.

Healthcare costs, forced early retirement and fear from government officials predicting the end of Social Security are the major factors for many seniors taking Social Security early. So when should you start collecting Social Security?  If you are in need of the benefit of collecting Social Security, then do not wait to collect.

However, if you can wait to collect, then it might be best to wait. According to a financial advisor from Schwab, a senior who made around $100,000 a year who collects Social Security at 62 would get around $1,800 a month. But if that senior waits to collect until 66, the amount would increase to about $2,400. Delaying even longer to age 70 would make the monthly payment to around $3,200.

A 2011 report from Employee Benefit Research Institute found that nearly half of the early boomers (56 to 62) are at risk of not having enough retirement income for “basic” costs in retirement like food and housing. Although Social Security may help, it will not solve the problem.

The best thing to do is talk with a financial advisor or planner. They will be able to help you evaluate your situation and help you understand what your options are. One option for you if you are senior 62 years or old is a reverse mortgage. A reverse mortgage eliminates your current mortgage and if you have any additional equity, you can access that money in tax-free* cash. A reverse mortgage can give you the financial freedom you are looking for with your retirement.

One Reverse Mortgage is the nation’s largest reverse mortgage only company. Our bankers are licensed professionals that help clients nationwide. If you have any questions or concerns call today (800) 442-6828 or contact us by email at help@onereverse.com.


Kristen Curzytek is a writer for the One Reverse Mortgage blog. One Reverse Mortgage is the largest reverse-only mortgage lender in America.

*Please consult with your financial advisor.