The Journey: Making the right choice on when to claim Social Security benefits

McClatchy-Tribune Information Services

August 24, 2015

Q: I will be turning 62 next year and would like to begin collecting early Social Security benefits. Am I penalized once I turn full retirement age of 66 for the amount I would receive then? Or does it revert to the amount on my Social Security yearly statement?

A: Generally, if you choose to begin receiving Social Security benefits before your full retirement age, yes, you will permanently reduce your monthly benefit. The reductions are designed to make your benefits actuarially equal no matter when you start them if you live to average life expectancy, though this can be complicated by issues including inflation adjustments and tax rates.

For people born between 1943 and 1954, full retirement age is 66 exactly. If you begin collecting at 62, your primary amount will be reduced by 25 percent. So if your full retirement age benefit is $1,000 per month, it would be permanently reduced to $750 (plus cost of living adjustments) at age 62.

Hereís another "give up" when claiming benefits early: You can earn delayed retirement credits by delaying claiming after full retirement age up until age 70. For those boomers born between 1943 and 1954, like you, thatís a full four years of delayed benefits, increasing at 8 percent per year, for a total boost of 32 percent above the original primary insurance amount of $1,000, to $1,320. Thatís a whopping 76 percent increase from the benefit amount if claimed at age 62.

Spousal and survivor benefits are also reduced by an early claim. Of course, if you are in ill health and arenít trying to protect income for a spouse or you have no other retirement income sources, delaying benefits probably isnít a realistic option.

There are free and paid services online that will help you figure out your best claiming strategy. Among them: AARP (, Bedrock Capital Management ( and Social Security Solutions (

Q: Thanks for the article on reverse mortgages. This case fits us. My wife was not 62 when we took out the reverse mortgage. I had contacted my lender and they did not know anything about this. Would you know the house bill number so I can refer them to it?

A: It wasnít congressional legislation, but new federal guidelines that expand options for certain nonborrowing spouses to remain in their homes when a spouse named on the reverse mortgage dies. Search online for "reverse mortgage mortgagee letter" for more information.

Q: What happens with a reverse mortgage when you live long enough to use up the money you have in equity? There is still a mortgage. Who pays that? Is that added to the bill I owe or am I once again responsible for paying the mortgage? Is the mortgage still paid up to the value of the house? What if I live long enough that there is no longer any money left to pay back the loan?

A: As long as at least one of the borrowers on a federally insured reverse mortgage continues living in the house, there is no loan repayment required, though housing officials stress that borrowers are obliged to keep paying property taxes and maintaining the home. When the last borrower moves, sells the house or dies, his or her estate is responsible for repaying the loan. (This can be delayed up to a year in cases when a borrower goes to a nursing home. There are other special provisions, as stated above, for qualifying nonborrowing spouses.) If the home is sold for more than the loan amount, heirs can keep the difference. If it sells for less, heirs donít have to pay the difference and the loss is passed along by the lender and absorbed by the federal government.