The Mistake: Taking Social Security Too Early
You should know by now that you can start claiming benefits as early as 62. Or, at least, we hope you knew!
But those born after 1959 should be extra careful. If you claim when you turn 62, you’ll be hit with a 30% reduction. The worst part is that the amount won’t go up again, so you’re stuck with a permanently lowered number even when you reach your full retirement age (FRA).
We think many people make mistakes because they’re not paying attention to when they really should retire. The issue is that Social Security is different for everyone, so even if your friends and family retire at a certain age doesn’t mean you should follow their lead.
Solution: Wait Longer Before Claiming Benefits
Many Americans feel compelled to quit their jobs as soon as they’re able to claim benefits. Honestly, we get it. Who wouldn’t want to kick back and relax after so many years of hard work? But are they really making the soundest financial decisions?
It really depends on the rest of your savings such as 401(k) or IRAs. But when it comes to Social Security alone, the more you wait, the better. You’ll receive 8% more money annually until you reach 70. Now, we’re not saying you should absolutely, 100% wait until you’re 70 as everyone’s circumstances are different, but if you’re able to work and in good health, why not try?
