When Should You Begin Taking Social Security Benefits?
Full Social Security benefits begin at age 65. But, you can begin receiving reduced benefits as early as age 62. And, if you continue to work after retirement and postpone taking your benefits, your eventual benefits will be increased. What should you do?
Generally, if you retire at age 62 (three years early), your Social Security benefit will be reduced 20%. If you retire at age 68 (three years late), your Social Security benefit will be increased 9%. Thus, if the monthly benefit for a 65-year-old retiree is $800, the monthly benefits for retirees at ages 62 and 68 are $640 and $872, respectively.
Some financial planners recommend early retirement. They'd rather see you get the cash today (plus the interest that it will earn) rather than wait three years or more for a bigger monthly payout. They also estimate that it will take you 12 to 15 years after age 65 before the extra 20% that full payments offer will equal your three years of reduced benefits.
Those who suggest waiting until age 65 or later point out that a 62-year-old person can be expected to live another 22 years. Plus, this person would also have the extra three years (or more) of earnings if he or she continues to work. They'd rather see you accumulate assets longer and receive a bigger payout down the road.
Before you decide, you should consult your professional advisor. And be sure to consider other factorssuch as your health, your need or desire to continue working, and your long-range plans-before you make a final decision.
The information above is provided as a service by #1 Insurance Quotes Life Disability Insurance. Protecting your personal and financial security is important to us. A #1 Insurance Quotes Life Disability Insurance representative, working in conjunction with your other professional advisors, can be instrumental in helping you plan for the best financial future for you and your family. Please contact us if you have any questions or are in need of planning assistance.