Boomers Taking Social Security Early

Posted by: Gene M. | Mar 13,2008


The conventional wisdom about Baby Boomers that most Boomers are going to take Social Security as early as possible.  Of course, there are articles stating the opposite (and I’ve written about it myself), showing that a lot of Boomers are working longer.  They don’t necessarily do this out of financial necessity, but because many Boomers can’t imagine life without working.  There are also those Boomers who are planning to stay in their jobs longer specifically because they cannot afford to do otherwise.  

In a generation of 80 plus million people, you are going to find all stripes.  In general though, it’s thought that most Boomers are going to take Social Security pay earlier.  It does make some sense.  If you’re in debt, how could you say no to another form of income.  Even if you’re not in debt, it’s hard to decline a check every month.  

However, you’ve got to look at it at another angle.  It’s something like looking at debt itself.  Though you might pay the same minimum every month and be OK with it, high-interest debt like credit card debt can drag on and on into the future.  Debt should not be calculated for what you pay on a monthly basis, but what you pay in the long term due to interest.  

Social Security works in a similar fashion.  You might get some short-term benefit out of taking Social Security early, but when spread out over the long-term it is hardly to your benefit.  It is estimated that you can lose up to 25% of your Social Security benefits if you file at the minimum age.  In addition, taking Social Security benefits early means you could face higher taxes on your retirement savings.  

So don’t just look at the check that’s being cut every month – look at the big picture.  Too many Boomers are not thinking long term.  Consider this before you file for benefits.  

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