Considerations for Taking Social Security Income Early

Julia M. Carlson |

I am 63 years old and working part-time. I am considering drawing social security income early. Is this a good idea?

There are several drawbacks to claiming Social Security benefits before full retirement age. For one, you may receive a significantly reduced benefit for the rest of your life. Some people insist on filing for benefits as soon as they are eligible, but consider this: There is now a 50% probability that one spouse of a couple who are both 65 will live until at least 92.  The longer you expect to live the better off you may be waiting to file for your benefits. This illustrates the importance of the income of Social Security.

A lesser-known downside is you might be subject to an earnings test if you claim benefits while still working. This means that half of anything you earn above the earnings test limit of $15,720 could be withheld until you turn 66.

An advantage of waiting to apply for Social Security is your benefits increase approximately 8% for each year that you delay filing up to age 70.  You might be very hard pressed to match this additional investment return. Instead, it may be wiser to draw down some savings if you need supplemental income. 

It's hard to deny the allure and immediate gratification of collecting benefits at the earliest possible time. I would encourage you to seek the counsel of a financial advisor that can help you weigh the pros and cons of your unique situation.

Julia Carlson is a registered Principal with, and securities are offered through, LPL Financial. Member FINRA/SIPC.

Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.