Should You Claim Social Security Early Because of the Coronavirus?
The Annuity Man
Great article by Sean Williams at The Motley Fool addressing the question of whether you should claim Social Security early because of the Coronavirus.
This current virus chaos is going to leave a lasting scar on society, but is also forcing people to make decisions that might not be a good idea. To start or not start your Social Security payments is just one of many financial decisions that people are struggling with during these unsettling times. Sean's article lays out the good and the bad of the Social Security decision. Below is just a sampling.
"Don't claim early because you're worried about Social Security's solvency. One reason you'll absolutely not want to claim Social Security early is because you're concerned about the immediate impact COVID-19 might have on the program. On one hand, Social Security will, in all likelihood, be adversely impacted by the coronavirus. The program has three ways of collecting revenue, with the 12.4% payroll tax on earned income doing the lion's share of the work. In 2018, the payroll tax brought in $885 billion of the $1 trillion that was collected. With unemployment rates skyrocketing in the U.S., it's a near certainty that payroll tax revenue will decline significantly in the short term, leading to Social Security's first net-cash outflow since 1982. On the other hand, this net-cash outflow isn't going to impact the ability of the Social Security Administration to make payments to its more than 64 million beneficiaries. Social Security ended 2019 with $2.9 trillion in asset reserves, so there's zero chance of your normal payment being disrupted."
Sean goes even deeper than that in this article, which is why it is a must read for all baby boomers and people already in retirement.