Most retirees start Social Security retirement benefits as early as possible–age 62. That makes sense, if you are no longer drawing paychecks and need the spending money. However, many people claim benefits at 62 even though they don’t need those Social Security checks. They may have cash flow from investments, a pension, or other sources.
* After paying into Social Security for many years, some people might just want to collect something as soon as they ca.
* Others may be uncertain about the future of Social Security so they want to get some cash flow while they can.
In reality, if you don’t really need Social Security at 62, there may not be a valid reason to start then. You’re likely to get the money, pay income tax, and reinvest what’s left.
On the other hand, if you delay taking benefits, your checks will grow. From age 62 to 66, your checks will increase by 33%. Wait another four years until age 70, the latest possible starting date, and your checks will be larger by another 32%. Why should you start early just to reinvest the after-tax amount when you can have the entire amount increasing by around 8% a year, guaranteed by the federal government?
Plus, waiting for a larger check at age 70 also can provide larger checks for your surviving spouse.