Decision Time: Take Social Security Sooner or Later?

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Educators who are CalSTRS members are not eligible for Social Security benefits unless they qualify through earnings from another job or their spouses. Those who are CalPERS members, however, will qualify for Social Security benefits as long as they have worked sufficient quarters to be eligible.

As retirement looms and you start to think about Social Security, you may wonder at what age you should begin collecting benefits.

You could receive reduced benefits as early as age 62. Another option is to wait until your full retirement age (age 65 to 67, depending on when you were born) to receive full benefits. Or you may want to reap rewards of waiting awhile beyond that. Payments can increase from 5.5% to 8% for every year beyond full retirement age, until age 70.

Social Security benefits are set up so that people who take payments early will receive a permanently reduced monthly payment and those who wait until after the full retirement age will receive larger sums. The system is designed so that, on average, participants will receive about the same total benefits over their lifetimes no matter when they begin collecting payouts. If you’re unsure about the best decision for you, consider asking some of these questions. Your choice could hinge on a number of factors pertaining to your individual situation.

Your annual Social Security statement (sent three months prior to your month of birth) includes a projected estimate of your benefits at age 62, full retirement age (65 to 67, depending on your year of birth) and age 72. It does not include any adjustments for work performed in jobs where you do not pay Social Security benefits. If you do not receive a statement, call the Social Security toll-free number at 1-800-772-1213.

What is your family history? If your relatives lived to enjoy the golden years for far longer than their average life expectancies, you may want to consider this in your decision. In case you need the extra money later in life, especially if you outlive pensions or annuities, it may be wise to delay payments for a few years. The Longevity Analyzer can help you determine how long can you expect your retirement savings to last.

Are you still working? The Social Security Administration may penalize people who work while taking Social Security payments before the full retirement age. Be sure to evaluate your financial situation to determine if it is absolutely necessary to take benefits early.

How healthy are you? For those who are in poor health, or have a family history of health problems, it may be a good idea to take benefits early. Receiving payments as soon as they are available could be more important than getting a larger payout.

Beyond Uncle Sam

The Social Security Administration includes a “break-even age” calculator on its Web site at and other tools to help you determine which path is right for you.*

No matter at what age you begin collecting benefits, Social Security is not likely to be enough to support a comfortable retirement. That’s why it’s important to contribute as much as possible to your 403(b) or 457 plan to supplement your CalSTRS or CalPERS pension. If you’re age 50 or older, you can make catch-up contributions to help your 403(b) or 457 nest egg grow even faster.

* Web site is provided for information only. No endorsement is implied.

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