Ask Money

Take Social Security now — or wait?

Chris Farrell Jan 9, 2012

Question: I will be 66 in June but want to continue working for 3 or 4 more years. (I am a college professor.) I am in the position of being able to take my social security check and put the full amount each month in a pre-tax IRA so I would not have to pay taxes on it. Am I better off doing this or should I delay taking it until I am 69 or 70 and get a larger amount each month? Thanks, Hal, Cullowhee, NC 

Answer: I would delay taking Social Security. Here’s why: The Social Security benefit increases every year you wait to file between ages 62 and 70. Better yet, between ages 66 and 70, the boost is an inflation-adjusted 8 percent. That’s a tough investment hurdle for anyone managing their own money to match, let alone beat.

You’re in good financial shape. You’re still earning an income. You can always tap your savings and retirement savings to supplement your earnings if you want. I assume you’re still in good health because you’re able to continue teaching.

It often makes sense for people in deteriorating health or people who can’t work to file for benefits so that they take advantage of the program and supplement their income. That’s not you. 

So, by waiting, you’ll get the best out of your Social Security dollars. What do you think?

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