As the owner of Bergen Financial Group, Darcy Bergen advises clients on all matters relating to financial planning and retirement. None are as confusing for his clients, however, as the Social Security laws, he says. Here, Darcy Bergen discusses how to determine when it the best time for you to start drawing your Social Security benefits.
There are basically three primary ages to remember about Social Security, says Darcy Bergen. The first date is the earliest date you can apply for Social Security, Darcy Bergen says. If you’re qualified to receive benefits, he says, you can collect as soon as you turn 62. However, just because you can, doesn’t mean you necessarily should, he adds.
The second date is the date you become eligible for your full retirement. This is important to know, Darcy Bergen says, since this is when you’ll be able to get 100% of your Social Security retirement. This date depends on your birth date, he adds and can range anywhere from age 65 to 67.
Finally, the age of 70 is when you’ll be able to take the maximum amount of Social Security, Darcy Bergen says. Each year you delay drawing benefits after your full retirement age, your benefit will continue to increase up to age 70, he adds. After that, it doesn’t make sense to wait since it will never go higher than that.
Social Security Explained | Darcy Bergen
However, knowing when to apply for your Social Security isn’t just a matter of simply picking a date, Bergen says. It all has to do with your financial goals, your assets, and what you have saved up for retirement so far. This decision as to when to draw your benefits is something that should be between you and your financial advisor, Darcy Bergen says, since there are several factors involved.
For instance, if you’re still working and you are under your full retirement age, your Social Security benefits will be decreased if you make over a certain threshold. This changes year to year, Bergen says, so it’s important to be aware. It may also affect the amount you pay in taxes since more of your Social Security money would be taxed. However, if you wait until full retirement age, you won’t incur either of these penalties, he adds.
If you’re married, that throws another wrench into the equation, Darcy Bergen says. Since your spouse will have a different full-retirement age than you, proper planning will allow you the maximum benefit for both you and your spouse. “And if your spouse is deceased,” Darcy Bergen says, “then all these changes since none of the above applies. A good place to start your research is the Social Security site itself.* My best advice is to start planning early, no matter your situation,” he says.