When Should You Take Social Security?

As a financial professional, I get a lot of questions. The one I'm asked most often—pretty much every day, in fact—is: "When is the best time to take my Social Security retirement benefits?"

And the answer I give is always the same:

It depends.

Deciding the right age to take your Social Security benefits can be tricky. No one wants to feel like they missed an opportunity or didn't have enough information. Here are some things to consider when making your decision.

Taking It Early

Although conventional wisdom says to delay taking your benefits for as long as possible, according to the Center for Retirement Research, nearly 40% of retirees file for Social Security as soon as they turn 62, the earliest age at which the Social Security Administration (SSA) allows you to claim your benefits. Their reasons differ. Some are forced or choose to leave the workplace at an earlier age. Sometimes their jobs are eliminated. Some become full-time caregivers for their parents or a spouse. Others are in failing health, or they have a job that has taken a toll on them physically and they just can't do it anymore.

In these cases, it can make sense to take your benefits early. Social Security is meant to help replace a portion of a worker's wages, and for many, Social Security is vital to meeting month-to-month expenses.

But there is a price: You'll receive up to 25% less than you would have if you'd waited until full retirement age, which is 66 or 67, depending on the year you were born. In the long run, that can add up to quite a bit of money.

Going Right On Time

If you make it to your full retirement age, you will be eligible to receive the full amount of your Social Security benefits. Many people choose to wait even longer and draw on their own assets to let their Social Security benefits accumulate.

But you might have good reasons for taking your distribution once you reach full retirement age. For example, depending on your strategy, you can pass your other assets on to your grown children, but not your Social Security benefits (unless a child is a dependent). So if you have a legacy goal, you may consider taking your benefits and saving the assets in your nest egg to pass on to your children and grandchildren.

Waiting It Out

From your full retirement age until you reach 70, your Social Security benefits will increase by 8% each year. If you decide to keep working until you're 70, it's kind of a no-brainer to keep that extra payout in mind.

There are other factors to consider when you're doing your Social Security math:

One is how long you think you're going to live. People, especially men, tend to underestimate their life expectancies; they point to when their dads died and expect they'll be about the same age. But men and women are living longer than they used to. The longer you stay healthy, the further you push your life expectancy. You don't want to outlive your retirement money.

You also may wish to wait as long as possible so that your spouse's benefit is higher. If one spouse has contributed less to Social Security over the years than the other, the higher-contributing spouse ideally would wait to claim benefits for as long as possible. Then if the higher-earning spouse dies first, the survivor can claim that spouse's full benefit.

In my opinion, many people fear that Social Security will be bankrupt by the time they retire and, using that reasoning, decide they should get their benefits before the funds are depleted. The SSA has estimated that, with the way things are currently going, the combined trust funds that help pay old age and disability benefits are likely to run out by 2034, but Social Security benefits won't disappear entirely when that happens. If nothing else changes, the payroll taxes still being paid by younger people in the workforce will be enough to fund about 79% of scheduled benefits, according to the 2015 Social Security annual report.

Social Security is a federal benefit that your financial professional can provide you with information about. Ultimately, it's a decision you have to make for yourself. That's why you should make sure that your financial professional truly understands your circumstances and the numerous Social Security withdrawal strategies available to you, and can adequately explain to you what role those benefits can play in your overall financial strategy.

Janie Kelly, RICP, is a licensed insurance professional and managing partner of the Jalbert Kelly Financial Group. She serves clients through retirement income planning and proactive personal service.

Investment Advisory Services offered on a fee basis through Global Financial Private Capital, LLC, an SEC Registered Investment Adviser.

Global Financial Private Capital does not offer tax or legal advice. Individuals are advised to consult with their own CPA and or attorney regarding all tax and legal matters.

Kim Franke-Folstad contributed to this article.