3 Reasons It Pays To Take a Smaller Social Security Check

Deciding when to claim Social Security benefits affects your financial future and potentially the quality of your life.

Some older adults choose to stay in the workforce longer to maximize their retirement savings. However, others choose to retire at 62, the earliest age you can begin withdrawing Social Security.

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Claiming Social Security early means permanently reducing your monthly payments. However, depending on your health, financial needs and longevity expectations, it could make sense to retire earlier and take a smaller check.

Here are three reasons it pays to take a smaller Social Security check .

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Bridge Your Finances

Taking a smaller check sooner may take the sting out of slowing down in your early 60s, said Paul Tyler, host of “ That Annuity Show .”

“Sometimes the choice is yours; other times it may simply be the reality of the job market,” Tyler said. “Having a reliable, smaller check may help you bridge your finances until you can fully downsize your lifestyle.”

In addition, check with your financial advisor to see whether you may retire early and draw a smaller Social Security check. For example, they can help you determine whether you’re eligible to withdraw funds from your employer-sponsored retirement account, such as a 401(k), after age 55 without triggering penalties. The “Rule of 55” only applies to retirement accounts with your current employer.

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Reduce Your Family’s Financial Strain

In recent years, researchers from around the world have studied the impact of retirement on mental and physical health. For example, studies in Finland and the United Kingdom found that people’s health improved after early retirement .

In the United States, a study examining the link between exercise and Medicare claims concluded that middle-aged adults who engaged in physical activity saved about $824 a year in healthcare costs.

“If you are in good health and your family has a history of living long lives, the break-even analysis will look better for you to defer retirement,” Tyler said. “On the other hand, if you have significant health problems and may not live until around age 84, taking the (Social Security) check may reduce worry for you and remove the future financial strain for your caregivers.”

Enjoy the Fruits of Your Retirement Savings

Retiring early and taking a smaller Social Security check may make sense if you took retirement planning seriously at an early age and the numbers support your decision.

Most experts suggest that couples should save enough to cover 70% to 90% of their pre-retirement income for each retirement year, to continue their current lifestyle.

“If you have a spouse who earned more and may be older than you, taking your (Social Security) check early may make sense,” Tyler said. “Definitely speak with a professional before making the decision.”

This article originally appeared on GOBankingRates.com : 3 Reasons It Pays To Take a Smaller Social Security Check