Poor Health May Force You Into Early Retirement, Before Applying Consider This First

Regrettably, only some people enter retirement in excellent health. When you’re in your early 60s, and you have several health problems, you may believe you won’t live very long, which may motivate you to file for Social Security benefits early.

You may begin collecting Social Security payments at the age of 62. Under the full retirement age (FRA), however, you will not be eligible for your total monthly benefits based on your work history. Depending on your birth year, that age is 66, 67, or somewhere in the center.

You also have the option to delay filing for Social Security past your FRA and increase your benefits. Your benefits will increase by 8% each year you delay your application until age 70.

In contrast, applying for benefits before FRA will lower them by approximately 6.67% each year for the first three years and 5% annually after that. Hence, if your FRA is 67 and you seek benefits at the earliest feasible age of 62, you will face a permanent 30% cut.

When your health is bad, and your life expectancy is short, applying for Social Security benefits early is typically recommended. This may result in less monthly benefit from the program but more long-term use. This reasoning is sound if you are only claiming benefits for yourself. But, if you expect your spouse to survive, you may choose to file for your spouse’s benefit at a later age.

Social Security does not just provide payments to qualified retirees; it also provides benefits to eligible spouses, and it also provides for their surviving wives after death.

If your health is bad, but your spouse is good, your partner may outlive you for several years. And if you delay claiming your benefits, you may leave your spouse with a more considerable lifetime income stream.

A monthly Social Security survivor benefit will be paid to your spouse, equal to the benefits you received while living. Suppose you are entitled to a $2,000 monthly payout based on your earnings history at age 67 FRA. If you file at age 62, your monthly payment will be reduced to $1,400.

You may receive more lifetime income from Social Security if you petition for benefits sooner rather than later. What if you die at age 70 and your husband, who is the same age, lives to be 90? At that time, a reduced survivor’s payout might be financially devastating for your husband. So, it may be advantageous to avoid collecting Social Security too early for your spouse’s benefit, especially if you have little in the way of pooled retirement assets.

A decision made collectively

You may be willing to delay Social Security benefits for the sake of your spouse — or you may not. But, before making any filing decisions, you and your partner should discuss the matter.

Your spouse may encourage you to register for Social Security benefits early to enjoy part of your income while you live and access more comfortable healthcare. Your spouse may want you to postpone your application so they do not have to worry about paying the expenses during your absence.

Of course, there are conditions regarding survivor benefits; if you are already collecting social security, you have the option to choose the higher one, which may be your deceased spouse. The advantage is that you can receive reduced benefits as early as 60 if your spouse worked long enough under Social Security and, when the time comes, switch over to your benefits later. Survivor benefits also take into account things like dependent children or being disabled. 

In any case, the choice to apply for Social Security is significant. Hence, if you share a life with another person, you must make this decision together.