Claiming Social Security Early? Here’s Who Might Regret It More Than You

Tens of millions of people rely on Social Security for financial support in retirement. After a long career, it’s comforting to know that you can get money from Social Security as early as age 62.

Many people base their decisions on when to claim Social Security on their own personal needs. In particular, if you’re in poor health, it often makes sense from a strictly individual standpoint to claim Social Security as soon as you can so that you’ll get at least some benefits from the program. However, if you’re married and your spouse doesn’t have a work history that matches up to your own, then claiming early might have the unintended consequence of leaving behind a source of regret and financial challenges for your spouse after you pass away.

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Why so many people claim Social Security early

It’s well-known that Social Security offers different payouts depending on when you claim benefits. At full retirement age — which is 67 for those born in 1960 or later — you can expect to receive your base benefit.

You can claim as early as 62, but you’ll get 30% less than your full retirement amount. You can also wait until you turn 70 and get a 24% boost to your monthly payments. That makes the benefit at age 70 77% higher than the benefit at age 62.

If you think you’ll live a long time, then giving up eight years of benefits in order to make each monthly payment larger can make a lot of sense. But if you’re doubtful that you’ll even make it to age 70, claiming early seems like the smarter move.

Why your spouse might regret your mistake

The problem, though, is that your own retirement benefits aren’t necessarily the only thing you should think about. Your spouse has the right to claim survivor benefits after your death, and the amount of the survivor benefit is based on a number of factors. One is when your spouse decides to claim those survivor benefits. Just as is the case with your own retirement benefits, a spouse who claims survivor benefits earlier will get less per month than someone who waits until full retirement age.

But another factor in determining survivor benefits is the amount that you were receiving prior to your death. If you claimed your Social Security at age 62, your reduced benefit would be the starting point from which your spouse’s survivor benefits would be calculated. Conversely, if you waited until age 70, that augmented benefit would become the baseline. The result is a potential 77% swing in survivor benefits, as well.

How this can play out

It’s easier to see the impact an early decision can have on a spouse through an example. Say you’re married and 62 and would be entitled to receive typical retirement benefits of $1,500 per month at a full retirement age of 67. However, due to a medical condition, you don’t expect to live to 67. Your spouse is also 62 and in good health.

Your first instinct might be to claim Social Security right away. That way, you’d get as much as five years’ worth of Social Security. The benefit would be reduced to $1,050 per month, but that’s still as much as $63,000 that you wouldn’t have gotten otherwise.

However, doing so would lock in your spouse’s maximum survivor benefit at $1,050 per month, as well. It could be even less if the timing of your death resulted in your spouse claiming benefits earlier than the spouse’s full retirement age.

By contrast, if you waited to claim — or even never got around to it at all — then your spouse would be entitled to a survivor benefit based on the full $1,500 amount. There’d still be a reduction if the survivor claimed before full retirement age, but it’d be based on that much larger $1,500 number.

In the end, your spouse would likely get $450 per month less until death. If you passed away at 67 and your spouse lived to 90, then over that 23-year period, the lost amount would be $124,200 in today’s dollars — almost twice as much as you would have received by claiming early.

A tough decision

Choosing when to take Social Security is difficult because you can’t predict the future. Before you take the money early, though, be sure to think about the potential impact on your spouse. It might change your mind about what the best choice is for your family.

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