Personal Finance

3 Facts About Social Security Every Baby Boomer Should Know

Senior Couple On Beach

The oldest baby bomers are now in retirement age, while the youngest are in their 50s. Considering that many baby boomers don't have substantial retirement savings, Social Security is set to remain a critically important source of income for millions of that generation as they retire over the next couple of decades.

Senior Couple On Beach

When you take Social Security, it has repercussions for your spouse, maybe even after you die. Image source: Getty Images.

This is particularly important to consider if your spouse will file on your work record, and is likely to outlive you. Here's what the Social Security Administration says about the survivors benefit and how it could be lower if you retire before full retirement age.

If your spouse started receiving retirement benefits before their full retirement age, we cannot pay you the full retirement age benefit amount from their record. The maximum survivors benefit is limited to what they would receive if they were still alive.

In other words, before you decide to take Social Security early, you may want to consider how it would impact your surviving spouse's income if they are likely to outlive you and would receive the survivors benefit.

If you're likely to live very long or die very early, it may affect when you should take Social Security

Social Security is structured to provide a lot of flexibility, since you can take benefits as early as age 62 or as late as age 70, depending on what works for your situation. And while the monthly benefit is significantly lower if you file early and much higher if you delay, the total dollars paid to someone who lives the average life span wouldn't be that much different.

But if you're an outlier with a significant chance of either living much longer than average or dying younger, that could affect what makes the most sense for you. Here's a table that breaks down where you would maximize your total benefit, based on filing age and age of death:

Ss Retirement Benefits Paid Out By Age Based On Claiming Age Vertical

Data source: Social Security Administration. Chart by author.

This table is based on a full retirement age of 66 and a full retirement age benefit of $1,000 per month. And as you can see, if you aren't likely to live beyond your mid-70s, it's almost certainly in your best interest to file at age 62 (with the caveat that you should consider how that would affect your surviving spouse). On the other end of the spectrum, if you're fortunate enough that you'll probably live well into your 80s or beyond, delaying Social Security will almost certainly mean more total income, not to mention a bigger check later in life when your ability to earn a wage is far more limited.

Take a balanced approach and consider all the repercussions

The facts above are largely about the financial impact of when you take Social Security. And while the financial part should play a primary role in when you file, it's not the only thing that matters. We must each also consider what kind of retirement we want, the value of other retirement assets, and what we want to do with the time we have before we die.

And the more you understand about Social Security before you retire, the more time you'll have to plan and prepare. If you want to maximize the quality and quantity of your retirement years, start today -- no matter how far from retirement you are.

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