Exploring the Pros and Cons of Taking Social Security at 63
Understanding the Eleventh Hour Decision
When considering when to start receiving Social Security benefits, one common question arises: What if I take Social Security at 63? There are a variety of factors to consider, including the potential impact on your retirement plans and benefits. While it's tempting to start collecting benefits early, the reality is that taking Social Security at 63 comes with several disadvantages. However, there are some scenarios where it might make sense.
Early Benefits and Retirement Considerations
Many people believe that taking Social Security at 63 will enable them to retire at 65. However, it's important to note that you do not receive your full Social Security benefits if you retire early. While 65 might not be considered very early compared to the official retirement age, taking benefits at 63 means you won't receive the full amount of your Social Security benefit until you reach your Full Retirement Age (FRA).
Typically, your Full Retirement Age (FRA) is around 67, depending on your birth year. If you take benefits before your FRA, you will receive a reduced amount based on the formula provided by the Social Security Administration. According to CNN, taking Social Security at 63 can reduce your monthly benefit by about 20- to 30%, depending on your individual circumstances and the year you were born.
There are tools available on the official Social Security website that can help you estimate your benefits at different ages. It's crucial to verify the authenticity of any website you use, ensuring it ends in .gov to avoid scams.
Caution and Considerations
It's important to approach this decision with caution. Many financial advisors and experts in the field agree that there are few true benefits to taking Social Security at 63. If you do choose to take benefits early, you're essentially reducing your overall payout, and in some cases, your benefits may be cut further if you start working again before reaching your FRA. This is because Social Security will reduce your benefit if you earn above a certain threshold while receiving benefits.
There are rare exceptions where early benefits might make sense. These include situations where someone is near death or cannot work due to disability, and lacks other sources of income. In such cases, taking Social Security at 63 can provide much-needed financial support.
A Personal Perspective
Based on personal experience and observations, taking Social Security at 63 is a significant decision that should not be made lightly. I, personally, am 63 and have been drawing Social Security Disability Insurance (SSDI) for the past 8 years. Having a disability myself, I can attest to the financial challenges faced before reaching the age of 65. Unlike those in better health, the reduced monthly amount from taking benefits at 63 can provide necessary support.
Physically demanding jobs have an inherent risk of causing long-term damage. For someone who has spent their working life in physical labor, the potential health risks associated with continuing work past 63 may outweigh the financial benefits of not reducing benefits. My personal situation, while challenging, does illustrate the financial necessity often faced by those who have worked physically demanding jobs.
While it's important to consider the financial ramifications, I also believe that enjoyment and physical health should factor into the decision. If you're in good health and enjoy your work, it might be prudent to continue working until you reach your FRA or beyond, depending on your personal circumstances.
For those who have physically demanding jobs, like land surveyors, the physical toll can be significant. As one surveyor tragically demonstrated, it's crucial to weigh the long-term health benefits against potential early retirement. Land surveyors, for example, often walk long distances every day, and the cumulative physical strain can lead to serious health issues. It's important to stop the damage being done to your body and consider the overall long-term impact.
In conclusion, while taking Social Security at 63 may not provide many tangible benefits, it can be a necessary step in some situations. However, it's crucial to thoroughly consider all factors, from financial implications to long-term health, before making this significant decision.