If you are depending on Social Security payments in retirement, then it is important to know the best timing to start taking distributions. What is the ideal timeline to start receiving these payments?
The Social Security Administration allows you to start payments as early as 62 years old. But, the “full retirement age” is at 67. If you accept Social Security payments before the age of 67, then it means that you are receiving early withdrawals. Consider these pros and cons to decide if it is a good idea for you to receive early Social Security benefits:
Pro: Immediate Money in Your Pocket
The obvious reason people take early Social Security withdrawals is because they need immediate money. Some people are worried about the fund being depleted in the future. Others might be in a tight financial situation and need payments right now. Taking the funds right now means that you access the money without delay.
Con: Smaller Payments
Accepting early Social Security payments means that you are locking in a lower monthly payment for the remainder of your life. For example, Social Security payments increase by approximately 8% per year. If your monthly payment is $2000 at the age of 62, waiting for five years can increase your payment to $2,758.
Pro: Enjoy Retirement in Good Health
There is a higher chance that you will enjoy better health in early retirement. This factor might be a motivation to take early Social Security withdrawals so you can use the money to pay for your dream retirement activities (such as traveling). Waiting until you are 70 means that you might be dealing with more health issues that could hinder your activities. Some people prefer to enjoy these benefits while they are younger.
Con: Minimize Lifetime Income
If you live a long life, then it means that you will be losing out on overall income. Even though you are receiving more payments overall, the lower monthly payments work out to be a smaller amount compared to the amount that adds up from higher payments. Initiating early payments means that you could potentially be receiving tens of thousands of dollars less over the remainder of your retirement.
Comprehensive Financial Planning
Social Security benefits are just one of the pieces that contributes to your retirement plan. In addition to timing your Social Security withdrawals, you also need to consider other financial strategies to build wealth to support your future retirement lifestyle.
Bulman Wealth Group is here to help with personalized, comprehensive financial planning. For more information, we invite you to schedule a consultation with one of our experienced team members.
Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an Investment Advisor in the State of California. Investment advisory services also offered through Retirement Wealth Advisors, LLC (RWA), an SEC Registered Investment Advisor. Bulman Wealth Group and RWA are separate entities, independently owned, and are not affiliated. Insurance products and services offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922.
Disclosure: All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or indication of future results. Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual adviser prior to implementation. Advisory services are offered by Chris Bulman Inc. dba Bulman Wealth Group an SEC Investment Advisor notice filed in California, Pennsylvania, Texas, and Nevada. Investment Advisory Services also offered through Retirement Wealth Advisors, LLC. a Registered Investment Advisor. Bulman Wealth Group and Retirement Wealth Advisors, LLC. are separate entities, independently owned. Insurance products and services offered through Chris Bulman Inc dba BWG Insurance Agency and Ameritas Life Insurance Corp. CA Insurance License #0D57586. Being registered as an investment adviser does not imply a certain level of skill or training. Bulman Wealth Group, BWG Insurance Agency and Ameritas Life Insurance Corp. are not affiliated with or endorsed by the Social Security Administration or any other government agency. The information contained herein should in no way be construed or interpreted as a solicitation to sell or offer to sell advisory services to any residents of any State other than the States of California, Pennsylvania, Texas, Nevada, or where otherwise legally permitted. Images and photographs are included for the sole purpose of visually enhancing the website. None of them are photographs of current or former Clients. They should not be construed as an endorsement or testimonial from any of the persons in the photograph. Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
All content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Nor is it intended to be a projection of current or future performance or an indication of future results.
Opinions expressed herein are solely those of Chris Bulman Inc. dba Bulman Wealth Group and our editorial staff. The information contained in this material has been derived from sources believed to be reliable but is not guaranteed as to accuracy and completeness and does not purport to be a complete analysis of the materials discussed. All information and ideas should be discussed in detail with your individual advisor prior to implementation. Investment advisory services are offered through Chris Bulman Inc dba Bulman Wealth Group, an SEC Registered Investment Advisor. Insurance products and services are offered through Chris Bulman, Inc. dba BWG Insurance Agency and Ameritas Life Insurance Corp., CA State Insurance License # 0M46922. Being registered as an investment advisor does not imply a certain level of skill or training.
Bulman Wealth Group, BWG Insurance Agency and Ameritas Life Insurance Corp. are not affiliated with or endorsed by the Social Security Administration or any other government agency.
Any statements or opinions expressed should in no way be construed or interpreted as a solicitation to sell, or offer to sell, advisory services to any residents of any State other than the States where otherwise legally permitted.
Images and photographs are included for the sole purpose of visually enhancing the website. None of them are photographs of current or former Clients. They should not be construed as an endorsement or testimonial from any of the persons in the photograph.
Purchases are subject to suitability. This requires a review of an investor’s objective, risk tolerance, and time horizons. Investing always involves risk and possible loss of capital.
