It's a difficult question, and it seems to me that the answers cross the spectrum. For some people waiting til 70 makes sense. These folks most likely have large savings (the kind we're all "supposed" to have) or else the ability work more years at a regular job. For the rest of us, the answers will lie somewhere in between. Some folks will take Social Security early for fear of what may happen to the system later, others will take it out of need. Others will opt in for any one of many reasons.
In my case, I have taken social security exceptionally early. At fifty nine (about to turn sixty), I'm now eligible for my husband's social security benefit. In theory, I could defer this, just as I could defer my own benefit for up to ten years. I chose to take this social security benefit as soon as I could for a variety of reasons. The first and most obvious reason was that due to some pretty horrible financial decisions (or lack of intelligent decision), I was operating with no savings and a thousand dollar pension. Social security moves me from having nothing to having a moderate income-which I am still learning to manage in retirement.
Even without this circumstance however, I can see good reasons to take social security early, both for myself and for others. Why?
- It may be that taking social security makes more sense than increasing your annual "take" from savings and investments. If your "number" per year is too tight, social security may make the difference. Yes, you could also take more from savings. But if you believe as many do that in the end result you make money in the stock market, it may make more sense to leave that interest producing money where it is. At the moment I have no savings. but I hope to rebuild at some level, and I would like that money to be earning money for as long as possible.
- Even if you are not on the edge, taking social security may enable certain extras. While most of us manage to cut expenses in retirement, there are those occasions where we could make use of that extra cash for the little things.
- For most of us, expenses (other than medical costs) will lessen as we age. We'll certainly be more interested in traveling at sixty five than at, say, eighty five. This in no way implies that life is not full at eighty five, just different. As such, I prefer to have the extra income available currently.
- For some, taking that money enables us to actually make life more stable later on. While some retirees have homes paid off, upgraded, repaired and outfitted for later years, some of us are not there yet. If I am to retire in place, it makes more sense for me to use whatever income I have now to make my house manageable, insulate to decrease costs, add things like safety bars and security systems if i feel they are needed. Not only that, but it may be cheaper to do it now while am able to do a certain amount of labor myself.
- We can always change our minds. I have returned to college with the goal of working at least part time as a translator. I also have a slowly blooming quilt business. Should those two options produce enough income for me, I can simply contact social security and defer payments until a later date.