Social Security: When to Cash In

Collecting hard-earned Social Security benefits as soon as they are available is a tempting option, but waiting just a few extra years can increase the benefits you would receive. The longer you hold out on dipping into your Social Security payments, the better. CNN Money points out that “The rough math: If instead of getting 100% at 66 you start collecting 132% at 70, it takes 12½ years for that 32% difference to equal the four years of benefits you would have collected starting at 66”.

 But there is a downside to not cashing in early: if you pass away before you start receiving your benefits, you and your survivors will receive nothing. This situation is what insurance companies call mortality risk. Experts recommend following a middle path, where you withdraw your benefits, but not necessarily right at the age of 62. Below is a chart that CNN Money provided to show benefits that people born through 1954 would receive:

Age:     Percentage:
62         75%
63         80%
64         86.6667%
65         93.3333%
66         100%
67         108%
68         116%
69         124%
70         132%

Tell us in the comments: do you plan on withdrawing benefits at age 62 or waiting?

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