According to conventional wisdom, everyone should strive to defer their Social Security benefits for as long as possible. And for most investors–those who will rely on Social Security to meet their monthly needs in retirement–continuing work until 70 and letting those benefits grow, is the right decision.
For clients who have done very well building their savings, the better decision might actually be to claim those benefits as early as possible. Why? Because there’s a distinct possibility that those same benefits might not be available to them in the future.
When you take a look at any study that’s been done on Social Security, you see they all show that the program is unsustainable in its current form. Its costs are growing faster than tax receipts and something has to give. One possible solution: The government could try to offset that shortfall by taxing younger workers. It’s also possible that the government could try to close the gap by using some form of means testing for higher-income retirees, which would mean that Social Security benefits would become need-based.
via Voices: Scott Hanson, on Taking Social Security Benefits Early – WSJ.