Coronavirus and Social Security: Should you consider collecting benefits early?

Fox Business ^ | May 8 2020 | Brittany De Lea

[rintintin]

The coronavirus pandemic is wreaking havoc on Americans’ financial situations, which may cause some older Americans to consider collecting Social Security benefits before they had planned to.

About 33 million Americans have filed for unemployment since mid-March. Considering one-third of the U.S. labor force is 50 or older, some older Americans may be forced out of the labor force years earlier than they had anticipated.

Social Security is a tool that is available to people who have worked for a sufficient number of years: For most Americans who haven’t started collecting, the full retirement age will either be between ages 66 and 67. Age 62 is the earliest you can begin collecting, while 70 is the latest.

While delaying when you collect, if possible, can actually increase your benefit by as much as 32 percent, some reasons that people may need to file early include paying for health care or paying for other immediate living expenses, particularly in light of job loss.

Chad Parks, founder and CEO of Ubiquity Retirement + Savings, told FOX Business that given the circumstances, collecting benefits early could be “the right move,” even for people who were planning to wait until age 67 or 68.

“It’s a very personal decision,” Parks added.

[Libloather]

Another option - Social Security Offers Lump Sum Payouts to Retirees

https://m.huffpost.com/us/entry/us_7012084

[Libloather]

More details - If You Change Your Mind

Unexpected changes may occur after you make your decision about when to start your Social Security Retirement benefits.

If you are receiving Social Security Retirement benefits and you change your mind about when they should start, you may be able to withdraw your Social Security claim and re-apply at a future date.

However, if you change your mind 12 months or more after you became entitled to retirement benefits, you cannot withdraw your application.

https://www.ssa.gov/planners/retire/withdrawal.html

[copaliscrossing]

Exactly. Get it while you can. Takes about 15 years to break even. My MIL waited until the last minute to take it ...and passed away a couple of years later.?

I agree that one of the biggest factors is paying for health insurance. Several things in play here including whether you can get on a spouses plan for a couple years or so.

So, my mom who is closing in on 80 years old told me to take it as soon as you can. I did the math and it would take until my really late 70's to burn through the amount I got from 62 through 67 years old (my full retirement age).

My mom told me about a conversation she had with a Funeral Home Director after a funeral service. She asked him what age were most of his "clients". He said without a doubt the mid 60's. He said what he sees happening is that a lot of peoples vices catch up to them at around 60 and many don't make a lifestyle choice (if they even live past their first health crisis). So it appears that a large number of people that paid in are either getting no benefits paid out or a lot less benefits paid out.

I think this is why so many are beating the drum to wait as long as you can. Think about it. If the SS system is struggling to keep up, you want as few people claiming benefits as possible and looking at the actuarial tables makes this call to wait an ctitical message to send.

[Bonemaker]

Cynical but undoubtedly true. I'm like your mom..80 next month. Been taking SS since 2002.😎

[RouxStir]

I’m trying to make a decision now. I just turned 63. I am thinking of taking SS at 63-1/2...using COBRA from then until 65, when I can get Medicare.

COBRA will run me $1250/month with $1000 deductible/$2000 max out-of-pocket for both me and my spouse...problem is my spouse is 8 years younger...guess I’ll be filing for divorce at 65... ;^)

[RouxStir]

“Lot’s of 62 year old’s take SS and then work part time job.”

I think it is now $18,000/year max. I asked my financial advisor about this. He said that you can do that but you must be VERY careful not to go over $18,000 because if you go over it is not just a little “tax” on the amount you went over...the PUNISH you brutally and have to pay a big penalty. He said that almost everyone that he know who attempted to stay under $18,000 did not do it and regretted it later.

I am no expert so I can’t verify this...but so far the guy hasn’t steered me wrong with the investments. And sometimes I get unexpected bonuses that could push me over the $18,000 mark. So I don’t want to take a chance.

[Robert357]

A very wise approach. Most people only look at when to take Social Security as a single person evaluation. It is actually for most a married couple financial evaluation.

[onona]

Got my eye on that kitty cat

[onona]

Apply 3 months before your 62nd birthday.

You become eligible first month after 62nd birthday then receive the payment for that month the month after that.

Soooo....if you turn 62 in June 2020, you will receive your first check in August which will be July’s payment.

I so thank you for that info !!

[knarf]

I was driving truck and I noticed my depth perception wasn't the best.

No major problems or accidents, but a couple of scrapes I was sure wouldn't happen that DID ?

Well ... all things considered ... I was tired and beginning to fall apart ...

I went out at 62.

... man's gaht'a know his limitations.

[Ge0ffrey]

I have international insurance. I live half the year in the US, half out of the country.

[Shark24]

Yeah), doing that with my money now. :)

[The Truth Will Make You Free]

It’s not that you are wrong, but your information source of lazy media is. Out of about ten articles I read when I researched this, only one correctly mentioned future payout would be increased for lowered payouts due to pre-FRA earnings above the threshold. They call it a “reduction”, when it really should be called a “deferral.”

Here’s from the SSA website itself: “In addition, after you reach full retirement age, we will recalculate your benefit amount to give you credit for any months in which you did not receive a benefit [I assume “benefit” means any portion of a full payout] because of your earnings. We will send you a letter telling you about any increase in your benefit amount.”

[SoCal Pubbie]

Okay but isn’t it still wiping out any current benefit if you earn too much?

[The Truth Will Make You Free]

If I understand it correctly, it reduces the current benefit, but will cause future benefits to be increased. So they are only “wiped out” if there’s not enough years of life left to recover them.

Here’s another source that validates the repayment. The author says it may take 15 years to recoup the amounts deducted. That agrees with my analysis that the monetary break-even is about age 80. If you expect not to live that long, begin drawing at 62.

[SoCal Pubbie]

Thank you. I will research further.

[GailA]

If you can then do so. Being disabled back then is not like it is today. Just claim mental illness. Less than a yr.

[gnickgnack2]

Bump for later reference

[SoCal Pubbie]

People do say I’m crazy...

[WildHighlander57]

Ge0ffrey wrote:

“I have international insurance. I live half the year in the US, half out of the country.”

How much do the premiums cost?