You may be overlooking this reason to delay Social Security benefits

Personal Finance

Just as taxes is a certainty in life, it also may be an inevitability when it comes to another important aspect of retirement: your Social Security benefits.

The fact that Uncle Sam could dip into your benefits could be yet another reason why you might want to delay claiming well past age 62.

Age 62 is the first point at which people are able to take their benefits. But because they are taking those payments early, those checks will be permanently reduced.

Age 66 or 67 is generally considered full retirement age, depending on the year in which you were born. At that point, you are eligible to receive 100 percent of your benefit.

If you delay beyond that, up until age 70, your benefit will grow by up to about 8 percent per year for every year you delay.

When deciding when to claim benefits, you should weigh your health, financial situation and marital status.

You also need to consider how your income from Social Security and other sources will be taxed.

“If you’re concerned about taxation and you want to reduce the taxable income, the easiest solution there, at least temporarily, would be to delay your retirement benefits,” said Stein Olavsrud, executive vice president at FBB Capital Partners.

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