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Do the math before tapping into Social Security benefits

Q.When should I begin collecting retirement benefits?

A.People are tempted to take Social Security early, but it is important to really think through the long-term ramifications that such a decision will have on you during your lifespan.

I have met many people for whom the extra benefit can make a positive difference to their lifestyle. Some want to collect Social Security benefits early because they wonder if the program will be around later; they figure they should take it while benefits are still available. This speculation could be costly.

It is important to calculate how much future benefit you will give up by tapping your benefits early. It is also important to know if you take your benefits early and continue to work, those benefits are taxed at a higher level than if you wait. What should you do to figure this out?

First, keep the statements you receive in the mail or request a statement from the Social Security Administration by calling (800) 772-1213, or go to

Figure out what you are giving up by taking Social Security early. For folks born in 1943 or later, full Social Security is between ages 66 and 67. See the website for details on the graduated scale. For people born between 1943 and 1954, full benefits are earned at age 66. Those benefits are cut to 75 percent if taken at age 62, 80 percent if taken age 63, 86.6 percent at age 64, and 93.3 percent at age 65.

Even if you think the difference isn’t worth the wait, do the math. An additional $250 a month is $3,000 over the course of the year. Keep in mind that Social Security historically has been indexed to increase with the cost of living. You would need about $100,000 in an investment to generate income to replace that lost income.

Your financial health and expected lifespan will factor into the decision. People are living longer than their ancestors. No one wants to run out of resources later in life.

In summary, don’t make this decision hastily. Obtain your Social Security information, gather as much of your financial information, including statements, as possible and meet with your financial planner to begin mapping out your personalized retirement plan.

Sarah Rieger is a certified financial planner and member of the local Financial Planning Association chapter. Readers are invited to submit questions on financial planning to be answered in this space each Tuesday. Send questions to