I’d like to continue the series on strategies for folks who get laid off before they are ready to retire.
Evaluate your Social Security options: The earliest age to start receiving Social Security retirement benefits is 62. At that age you can collect 75% of the monthly benefits. For folks born in 1960 or later, age 67 is when you can collect 100% of your benefits. If you have a severance, emergency fund, or some other income sources, then waiting until full retirement age to claim benefits could be the best plan. However, if that is not a viable option, claiming now with a reduced benefit can be helpful from a cash flow perspective.
It’s important to note that while you are allowed to collect Social Security and unemployment benefits simultaneously, depending on where you live, your unemployment benefits might be reduced. If you have income coming from outside sources, it’s important to do your due diligence before claiming Social Security.
One last point I’ll make is, if you can figure out a way to delay claiming social security until age 70, which may not be prudent or possible, your ongoing benefit will be increased. Social security is unique in that it is a guaranteed stream of income that increases with inflation and cost of living adjustment. Keep this big benefit in mind when deciding whether to claim social security.