One of the most common questions I am asked in retirement planning, is “When do I start to take my Social Security benefits?”
The answer, of course, is it depends.
First of all, I have to ask a client if s/he expects Social Security will be there when s/he retires. If s/he says yes, then we have a different conversation.
If s/he says no, then we close the book on that one.
In the former case, the answer will depend on what type of resources you have: pensions, 401k plans, TIAA-CREF plans, personal investment accounts, annuities, life insurance cash values, and/or rental income from investment properties.
It will also depend on how old you are when you decide to retire. Some resources are not available until age 59 ½ without penalty, some reward you with a higher amount the longer you wait to take it, some will cause some penalties if the contracts were not held for a minimum of 10 or more years.
It is like setting out a roadmap with dates and time when the money should begin to be taken. In some cases, completely liquidating one asset before starting to take another is a great idea. It would be contrary to what most people think. But it makes sense.
It is very important you speak to an advisor before you think you should take your Social Security benefits. Postponing them may be the smartest thing you can do; on the other hand, taking them when you are age 62 might be the wisest.
As always, we are here to help you map this out. Please feel free to give us a call.