{"id":42604,"date":"2021-08-03T04:15:42","date_gmt":"2021-08-03T11:15:42","guid":{"rendered":"https:\/\/lenpenzo.com\/blog\/?p=42604"},"modified":"2021-07-29T15:01:16","modified_gmt":"2021-07-29T22:01:16","slug":"the-pros-and-cons-of-taking-social-security-early-2","status":"publish","type":"post","link":"https:\/\/lenpenzo.com\/blog\/id42604-the-pros-and-cons-of-taking-social-security-early-2.html","title":{"rendered":"The Pros and Cons of Taking Social Security Early"},"content":{"rendered":"

\"social<\/a>Nobody knows exactly how long Social Security will last, but for the time being you’re still entitled to what the government has stashed<\/a> on your behalf over the course of your life. So at least for now, the dilemma is not if<\/em><\/strong> you’ll receive the payout to which you’re entitled but rather when<\/em><\/strong> you should take it.<\/p>\n

If you retire earlier than age 70, you may need the money to get by in your golden years. But is taking your Social Security early the best bet?<\/p>\n

These pros and cons will help you decide what the right decision is for you:<\/p>\n

Cons of Taking Social Security Early<\/strong><\/u><\/p>\n

You won’t receive the maximum amount to which your entitled.<\/strong> The major problem with taking your social security before full retirement age is that you’ll receive a smaller benefit based on the number of months you took it before reaching that milestone — and that can result in a significant<\/em> cash reduction.<\/p>\n

You’ll miss out on future opportunities to increase your Social Security benefits.<\/strong>By taking Social Security early, you’re locked into that decision and all future increases will be based on the initial lower amount.<\/p>\n

You may inadvertently ‘cheat’ your spouse out of benefits. <\/strong>You may be giving up a decent sum of money for your spouse if your earnings are not maxed out — and you pass away first. “The surviving spouse receives the higher of their own benefit or their spouse’s benefit,” says Gary M. Shor, vice president of financial life planning at AEPG Wealth Strategies. “This would be especially painful if the surviving spouse with the lower benefit lives a long life.”<\/p>\n

You may be taxed on your Social Security if you take it early and still earn a decent income. <\/strong>Social Security becomes taxable when your income reaches a certain threshold. Enrolled agent Jeffrey Schneider offers a quick way to determine if a taxpayer must pay taxes on those benefits. “Add one-half of the Social Security income to all other income, including tax-exempt interest,” he says. “Then compare that amount to the base amount for their filing status. If the total is more than the base amount, then some benefits may be taxable.”<\/p>\n

The three base amounts are:<\/p>\n