social security

If your financial or employment situation has changed due to coronavirus, you may be rethinking your Social Security claiming strategy. While you can claim Social Security benefits as early as age 62, you will receive a permanently smaller benefit. If you wait to claim past your full retirement age, your benefit will increase by 6 – 8% per year you defer until age 70. This can make balancing immediate needs with long-term financial well-being difficult. There are so many ways to claim Social Security and what strategy is best depends on your unique financial situation, which may have changed recently. Here’s what to consider before claiming Social Security early due to financial hardship.

CARES Act Expands Unemployment Benefits

You may be eligible for unemployment benefits if you lost your job or were furloughed because of the coronavirus shutdown. The CARES Act also includes unemployment benefits for the self-employed. Payments are based on how much you were earning and aim to replace half of your previous income.

CARES Act 401(k) Loans and In-service Distributions

Many 401(k) and other defined-contribution plans allow for loans of up to $50,000 or half of the vested account balance. The CARES Act has temporarily modified this loan rule: Most 401(k) participants can now borrow up to $100,000 or 100% of the vested amount – whichever is less.[1] Those who have been diagnosed with the coronavirus, laid off, furloughed, or had their hours reduced can take an in-service distribution from their IRA. Normally, there is a 10% early withdrawal penalty for those who withdraw from their retirement account before age 59 ½. The CARES Act waives this penalty for withdrawals of up to $100,000. You can also take up to three years to pay the tax on the distribution.[2]

Claim and Suspend Benefits

If you think you need to claim earlier than you originally planned, keep in mind that you have one year after claiming to suspend benefits. If you find another job in the next year, you can repay your benefits and go back into deferral. This way, you can still receive a larger monthly benefit by delaying your Social Security benefits. There are so many ways to claim Social Security, and a qualified financial advisor can help you decide or update your strategy.

An earlier retirement date or market downturn might upend your financial plans and Social Security claiming strategy. A qualified financial professional can help you balance your short-term needs with your long-term financial goals and help you create an income plan to replace your paycheck to help ensure you don’t run out of money later in retirement. You can contact us to schedule a complimentary review to discuss.


The commentary on this blog reflects the personal opinions, viewpoints, and analyses of BML Wealth Management’s employees providing such comments and should not be regarded as a description of advisory services provided by West Wealth Group, LLC. The views reflected in the commentary are subject to change at any time without notice. Nothing on this blog constitutes investment advice. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Past performance is no guarantee of future returns.

Investment advisory services through West Wealth Group, LLC, an SEC Registered Investment Adviser. BML Wealth Management and West Wealth Group, LLC are affiliated entities. Insurance Services are offered through BML Wealth & Insurance Services, California Insurance License #0M15550.

We do not provide tax or legal advice. All individuals are encouraged to seek guidance from qualified professionals regarding their personal situation. Any references to protection benefits or steady and reliable income streams in this guide refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products.