Millions of Americans are struggling due to the COVID-19 crisis.
While there's been some relief (including boosted unemployment benefits, forgivable small business loans, and the stimulus payments), the bottom line is that things are tight financially.
This has many Americans tapping their Social Security prematurely to ensure a reliable, consistent stream of income. Tempting…but should you?
Here are a few things to consider:
Delaying Social Security payments until you’re 70 gives you more money every month.
Consider this: Between the ages of 62 and 70, your Social Security benefits rise about 8% for each year you defer taking them. Where else can you get such a high return (guaranteed) in today’s environment?
Furthermore, you might need that extra cash to pay for health-care expenses not covered by Medicare, such as long-term care assistance.
Do you have other assets you can tap? Any cash sitting in an emergency fund? Can you cut expenses?
You don’t want to make a rash decision out of fear. No one knows how long it will take for the economy to recover, but it will improve eventually.
Your personal situation
Taking Social Security early in these uncertain times could be the right call for some, but it depends on several factors, including what other savings you have, how long you expect to live, and the reason behind your desire to start benefits early.
In other words, it’s a personal decision that should be part of a broader conversation about budget, expense, and income.
And even your health: If you're concerned you won't live long enough to make delaying benefits worthwhile, then starting early might make sense.