Social Security can be confusing, and many people have questions about it. Here are five reasons people have given us for taking their Social Security early. I’ll tell you if it’s legitimate or if you should think twice:

1. I’m retiring at 63. I want to take Social Security early as an additional source of income so that I won’t have to pull money from my portfolio. This way, my retirement accounts will last longer.

This is a solid reason to do it. I would say that it’s very legitimate.

2. I’m 63 but still working. I want to take Social Security early so I can pay off my house before I retire.

The idea here is if they take the additional income from Social Security now, they can pay down their mortgage so that when they retire their home is paid for and they won’t have a mortgage in retirement. That would make me think twice.

The thought process has potential behind it, but there are some red flags. What’s the red flag? If you’re working and taking Social Security before your full retirement age, you get dinged for that. That paycheck you thought you were going to get from the Social Security Administration might not be as high as you were expecting and you’re locking yourself into that rate long-term. If you retire before your full retirement age and you’re still working, you can only earn about $19,000 a year. If you make more than $20,000, they start taking away your Social Security. It’s not a high threshold you have to pass before they start dinging you. It’s a bad idea.

3. I’m going to take Social Security as soon as I can because I’m worried that Social Security is running out of money, and I want to get it while I can.

This scenario is a think twice for me. The timing of it may be okay for them, but I don’t like the idea of taking Social Security early just because you think you’re going to run out of money. There are a lot of media outlets that push that narrative. They use scare tactics instead of logic and reason. They scare you so that you’ll watch them and then their advertisers will pay them more. If your media outlet is pushing that narrative, you probably should change media outlets.

The risk right now is that your Social Security check might be reduced by maybe 20%. That’s probably not going to happen in a world where we can kick our politicians out of office. If I’m in office as a politician, and something like that happens, what’s going to happen the next time my reelection comes up? I’m going to be gone.

4. I want to take Social Security early because I’m retiring. I want to have money now while I’m younger and more active. When I’m in my 80s I’m going to be less active and won’t need as much money.

The idea is they’d rather take Social Security now because they’re younger and more active. If they waited until they’re 70, they would have more money in their 80s from Social Security but whoop dee doo; they won’t be spending it. That’s a legitimate reason. Some people want to wait until 70 because they want to get the money they paid into it. If you take Social Security in your mid to late 60s, you will get less than if you wait until you’re 70. On the other hand, if you take it at 70, you’d have to live into your 80s to break even. This is a very legitimate reason.

5. I want to take Social Security early because I don’t think I’m going to live past my 80s. Why should I care if I’m not going to live that long anyways?

I would think twice. Let’s imagine you’ve had a ton of health problems and no one in your family has lived to age 80. You’ve had three heart attacks and you’re 62 years old. Yeah, you’re probably not going to make it to 80. I’ll buy that one. However, most people I’ve talked to underestimate how long they’re going to live. They’re likely going to end up living longer than they think.

There might be other legitimate reasons to take it early. If the reason is that they don’t think they’re going to live long, the odds are better that they’ll make it. Medical care and medicine advance every year. Doctors are keeping us alive longer and you should plan on living a longer life. Assume longevity even if you don’t expect it. You may still take Social Security early for other legitimate reasons, but I’d rethink taking it solely because you don’t expect to live long enough to break even.

If you are wondering when you should take Social Security, talk to us. We’re happy to have a conversation and guide you towards decisions that help you build a rock-solid retirement plan where the market doesn’t affect your financial security.

We want you to have the three C’s of retirement. The first C is Control. We want you to have control over your finances. Control leads to the second C, which is Competence. The third C is Comfort and peace of mind that everything’s going to work out. Give us a call!

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