TAKING SOCIAL SECURITY IN THE PANDEMIC
May 7, 2020 - Douglas Myser
Taking Social Security in the pandemic. The trend has been moving in a positive direction: Over the last decade, far more workers who are eligible for Social Security have been waiting to file, often substantially increasing their lifetime annual benefits. But the stunning job losses in the pandemic induced economic crisis could bring this trend to a crashing halt, as suddenly unemployed older workers without substantial savings scramble to meet living expenses. At a time when fewer retired households can rely on traditional pensions and only about half own retirement accounts, Social Security is the most important benefit for most Americans. Even in good times, there is no simple, one size fits all answer when it comes to timing a claim--your longevity, savings and any other pension income are important factors. Now the decision is complicated by the highly uncertain outlook for the economy, jobs, and financial markets. But even if you need Social Security income immediately, you may have options worth considering that can boost lifetime benefits. Taking Social Security in the pandemic.
Some pros and cons of different strategies for claiming benefits. I need income now, Why Wait for my Social Security claim ? You claiming age matters a great deal. You can file as early as age 62, but your annual benefit will be higher for every year you wait, until age 70. Social Security uses an actuarial formula tied to your full retirement age--the point at which you can claim 100 percent of the benefit you've earned over the course of your working life. If you file before your fill age, your benefit will be reduced by as much as 6.7 percent annually, depending on when you claim. The bite is bigger than in the past because of changes enacted in 1983, when a gradual increases in the full retirement age from 65 to 67 was set in motion. Those increases, which still are being phased in, effectively set the bar higher for claiming a full benefit.
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