Social Security is the backbone of many people’s retirement planning. However, figuring out when to retire is often easier said than done. You can retire anytime after 62, and delaying longer leads to a higher monthly benefit.

Delay too long, though, and you risk not being able to enjoy much of your retirement!

While delaying Social Security maximizes the monthly payout, claiming at an earlier eligibility age – 65 – offers certain advantages. 65 is no longer the “official” retirement age. For many, that’s pushed to 67. However, it does depend on the year you were born. (You can use SSA’s retirement age calculator to determine when your full retirement age is, which is important when deciding when to retire.)

That said, there are many benefits to retiring at 65, and many people still do. For those with health limitations, claiming Social Security at 65 provides crucial income to manage rising healthcare costs and potentially reduced earning capacity. By doing so, you can gain crucial financial support to manage rising healthcare costs and potentially reduced earning capacity, ensuring a more secure and manageable retirement.

Impact of Health on Earning Capacity

We’d all like to stay healthy well into our senior years. Unfortunately, this isn’t always the case. Health problems can sneak up on us when we least expect it – sometimes before we even reach retirement. Those with serious health challenges may find their earning capacity cut or be forced to retire early.

Chronic illnesses, such as heart disease, arthritis, or respiratory conditions, can significantly limit a person’s physical capabilities and stamina, making it difficult or impossible to perform their previous job duties.

This reduction in earning capacity creates a double bind for retirees with health limitations. Not only are they facing increased healthcare costs, but their ability to generate income to cover those costs is also potentially diminished.

If you fall into this category, it may just make more sense to retire at 65 instead of trying to maximize your Social Security benefits.

Often, it makes more sense to maximize your health. The guaranteed income from Social Security can be exceptionally helpful even if you can still work. Going down to part-time and claiming Social Security may provide the break you need to support your health.

How Social Security Benefits Help

Social Security acts as a vital safety net for retirees, offering a guaranteed monthly income that isn’t tied to market fluctuations or employment status. For those with health limitations, claiming Social Security at 65 can provide many benefits:

• Immediate Financial Support: Claiming benefits at 65 allows retirees to access this income stream immediately. This is crucial, especially when facing rising healthcare costs. The guaranteed income from Social Security can cover essential medical expenses, prescriptions, and potentially even long-term care costs.
• Predictable Income Source: If you have a chronic condition, there is no telling when it will flair up. Having a predictable stream of income that isn’t reliant on your ability to work or not can be a huge stress relief when you’re in the middle of a medical battle.
• Reduced Financial Stress: When you’re sick, the last thing you want to worry about is financial problems. Even if you don’t really need it, claiming Social Security at 65 can help you alleviate some stress by providing a buffer in case your health problems get worse.

If you end up with a chronic condition, your Social Security may be more than enough to continue living your lifestyle while paying for extra medical expenses.

Potential Drawbacks

Of course, there are several drawbacks to claiming Social Security early, too. Your monthly benefit will slowly increase if you wait past your eligibility age. Delaying is also very tempting, especially if you don’t have tons of savings for retirement.

However, delaying may not be the most prudent choice if you have medical limitations.

The primary reason lies in the uncertainty associated with health. While delaying benefits offers a higher future payout, it hinges on your ability to enjoy those benefits for an extended period. After all, a higher payout doesn’t help if you don’t make it more than a couple of years later.

For those with health concerns, this future might be less predictable. You might not live long enough to recoup the financial benefit of delaying benefits. You may make less Social Security over your lifetime if you delay.

Furthermore, the guaranteed income from claiming at 65 allows for greater flexibility in managing healthcare needs. As discussed earlier, healthcare costs can fluctuate significantly depending on your specific health situation. Chronic conditions can be particularly troublesome to pay for.

Having Social Security’s immediate financial support allows you to adapt to these changes and cover unexpected medical expenses without losing your financial stability.

When deciding when to claim Social Security, we recommend reviewing our Social Security guide. Understanding how exactly Social Security works and how your age affects it is vital to making a good decision for your retirement.

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