Q. When is the best time to start collecting social security benefits?
A. There is no definitive answer, but there are a few guiding rules.
First, if you're still working, don't claim benefits before your full retirement age.
This is the rule thumb that nearly every expert can agree on. You shouldn't claim early while you're still employed unless you truly need the money to survive, because it comes with hefty penalties.
Until you reach the full retirement age, for each $2 you earn in 2013 above $15,120, you lose $1 of your annual Social Security benefits. By contrast, after 66, benefits don't get cut no matter how much you earn. If you're working, try to wait. Also, don't take the money early thinking you'll make more by investing it: If you invested the money, you would need to earn more than 7 percent annually to equal what you'd make by delaying benefits until full retirement age.
Next, don't take Social Security until you're sure you want it.
Up until December 2011, the Social Security Administration had a "do-over" strategy that had allowed seniors to file for benefits and then later repay them, without interest, to get a bigger check. In effect, you got eight years -- from 62 to 70 -- to change your mind about taking early benefits. You could even use a do-over as a way to get an interest free loan from the government. But since December 2011, you have only 12 months to change your mind after initially filing for benefits.
Finally, figure out your average life expectancy.
A woman turning 62 this coming year will live to an average of 85.5 and a man of the same age to 83.4. But what about your health and your genes? There are a bunch of websites that calculate your life expectancy while taking into account your health, family history, exercise, eating, drinking and driving habits and even social relationships. If you're not in great health and you want to get some of your tax dollars back, it can make sense to start claiming Social Security as early as possible.
A. There is no definitive answer, but there are a few guiding rules.
First, if you're still working, don't claim benefits before your full retirement age.
This is the rule thumb that nearly every expert can agree on. You shouldn't claim early while you're still employed unless you truly need the money to survive, because it comes with hefty penalties.
Until you reach the full retirement age, for each $2 you earn in 2013 above $15,120, you lose $1 of your annual Social Security benefits. By contrast, after 66, benefits don't get cut no matter how much you earn. If you're working, try to wait. Also, don't take the money early thinking you'll make more by investing it: If you invested the money, you would need to earn more than 7 percent annually to equal what you'd make by delaying benefits until full retirement age.
Next, don't take Social Security until you're sure you want it.
Up until December 2011, the Social Security Administration had a "do-over" strategy that had allowed seniors to file for benefits and then later repay them, without interest, to get a bigger check. In effect, you got eight years -- from 62 to 70 -- to change your mind about taking early benefits. You could even use a do-over as a way to get an interest free loan from the government. But since December 2011, you have only 12 months to change your mind after initially filing for benefits.
Finally, figure out your average life expectancy.
A woman turning 62 this coming year will live to an average of 85.5 and a man of the same age to 83.4. But what about your health and your genes? There are a bunch of websites that calculate your life expectancy while taking into account your health, family history, exercise, eating, drinking and driving habits and even social relationships. If you're not in great health and you want to get some of your tax dollars back, it can make sense to start claiming Social Security as early as possible.
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