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Understanding Social Security Break-Even Points
Deciding when to file for Social Security could make a large impact on your lifetime benefit.
Longer life expectancies mean you will likely need Social Security income for a longer period of time. So it may make sense to take advantage of delaying rules that can grow your monthly benefit, while helping you accumulate more benefits over the course of your retirement.
There are times, however, when it makes sense to start Social Security benefits sooner – even if reduced. For everyone, there is a break-even point – typically between 12 to 15 years from the start of Social Security benefits – where accumulating higher benefits over a shorter period outweighs collecting smaller benefits over a longer period.
For a single person, life expectancy primarily determines when this break-even point may occur. For a couple, a break-even analysis is complicated by the different life expectancies of each individual. Typically, this analysis would look at all possible life expectancy combinations and focus on a strategy that would provide the largest lifetime benefit to both spouses for as long as either spouse is alive.
Deciding when to file for your Social Security benefits is an individual decision. And while the benefits are great, the rules may make it challenging to know the best option for you. Figuring it out is not something you have to do on your own. Your financial advisor can provide valuable guidance as you navigate the rules.
This content was created and distributed by Nationwide. Raymond James is not affiliated with Nationwide.