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Deciding when to take your Social Security retirement benefits is a crucial decision no matter when you make it.
Making that call during the coronavirus pandemic can raise the stakes.
That's because the age at which you decide to claim will lock in the amount of monthly income you take in for the rest of your life.
If you claim as soon as you are eligible — age 62 — you will receive reduced benefits for starting early. Wait until your full retirement age — typically 66 or 67, depending on the year in which you were born — and you stand to receive 100% of the benefits you earned.
Delay until age 70 and you get a boost of about 8% for each year you wait from full retirement age.
Postponing Social Security until that milestone has always been difficult. It relies on the combination that your health, income and career will hold out.
Now, during the coronavirus pandemic, any or all three of those factors may seem like bigger wild cards than ever before.
Meanwhile, recent research points to the idea that Social Security's trust funds, which underpin the system, could run out sooner than previously anticipated.
Those factors could prompt you to wonder if you should adjust your strategy. Here are the biggest questions to consider as you weigh your claiming decision.
Should I claim early because the trust funds are running low?
Recent research from the University of Pennsylvania's Wharton School found that Social Security's trust funds could run dry four years earlier due to the coronavirus pandemic.
That would push the date they are projected to run out to 2032 rather than 2036.
However, that does not mean that at that point there would be no benefits at all. The Social Security Administration's most recent estimate pegs the depletion date at 2035, at which point 79% of promised benefits will be payable.
To anticipate those changes, people should try to save more toward retirement, said Kent Smetters, faculty director of the Penn Wharton Budget Model, a nonpartisan research organization at the school.
If people's reaction to this downturn is anything like the Great Recession, they may be tempted to claim benefits earlier. The Center for Retirement Research at Boston College found that the earlier downturn prompted more than 5% of the eligible population to start getting checks at 62.
But fears about funding alone shouldn't prompt someone to claim early, said Joe Elsasser, president and CEO of Covisum, a Social Security claiming software company.
"You just start to think, 'Would my cash flow situation still be OK if I receive that sort of benefit cut?'" Elsasser said. "If not, there are a variety of ways to plan."
That includes spending less early in retirement or delaying retirement. "Claiming early doesn't solve that problem," Elsasser said.
Does waiting until 70 still make sense?
The short answer to this question is for most people, yes.
That's because it's difficult to find an investment with the same guaranteed return, particularly in a low interest rate environment.
"What you can get in terms of return on similarly safe investments is very close to zero," Elsasser said.
Meanwhile, stock market investments often are too risky.
If you're in your early 60s and have lost a job, you should only claim early if you have no other source of income, Elsasser said.
"If you have home equity or if you have 401(k) or IRA savings, it's absolutely worth considering using those sources of income to bridge the gap during a period of Social Security delay," Elsasser said.
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People who can justify taking benefit checks early include single men or women who have health issues. Otherwise, everyone should try to delay, particularly high earners who could also trigger higher benefits for their spouses by waiting, Elsasser said.
If you do decide to claim early, there are strategies you can apply if you change your mind later.
Once you start receiving checks, you have up to one year to withdraw your application. But you can only do this once in your lifetime. And you must repay all of the benefits that you received.
Another strategy is to claim now and then suspend your benefits at full retirement age and let them grow up to age 70. But you have to be willing to live without those monthly checks during that time.
"Taking benefits for a year and suspending them at full retirement age might be a good way to restore that loss of taking a benefit early," said David Freitag, financial planning consultant at MassMutual.
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Where can I go for help?
Covid-19 has forced the Social Security Administration to close its field offices. Currently, there is no indication as to when they may reopen.
"We are not able to accept in-person visitors to our local offices at this time, except by appointment for dire need situations," the Social Security Administration said in a statement.
Because office visitors are often older, they are more at risk for severe illness, the agency said.
"Our goal is to continue to serve the American public while doing what we can to reduce the risk to our employees and visitors," the agency stated.
The good news is that most of the services are available online or over the phone.
If you want help sorting out your claiming decision, there are better resources to turn to, Elsasser said.
Your Social Security claiming decision should be coordinated with all of the financial assets you have accumulated, he said.
One tool called Maximize My Social Security is a "reliable and strong tool," Elsasser said. It costs $40 for an annual household license.
Another way is to meet with a financial advisor, who can help you come up with a plan. You will likely have to pay a fee for the advice. Just make sure that the professional you meet with is truly versed in the complexity of Social Security planning, Elsasser said.
"The easy way is just to say, 'That makes a lot of sense. Show me the math,'" Elsasser said. "They should have gone through some sort of exercise that they can demonstrate in the software tool they use to show you the why."
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