A discussion about Social Security and the numerous issues to consider with Tim Moomey of the FSB Investment Center. Here’s what he said about it.
What to expect in Social Security? (Source: CNBC)
Social Security Benefits: What to Expect and What to Prepare?
According to a recent NTV abc article, if you are 62 years old, you will soon have to make a critical decision regarding when to begin receiving Social Security benefits. You should consider a variety of options. Current US law allows anyone between the ages of 62 and 70 to begin receiving Social Security benefits. The longer you wait to claim your Social Security benefit, the larger your monthly amount will be. Concerning the payout. There is no defined amount. Rather, it is determined by the amount you have earned and the age at which you begin receiving payments in comparison to what the government regards to be the regular retirement age.
This figure – regular (or full) retirement age – varies based on the year of your birth. For example, if you were born in 1937, your typical retirement age is 65. If you were born 20 years later, in 1957, the normal retirement age is 66 years and 6 months. If you were born in 1960 or later, your SS Full Retirement Age is 67. If you begin collecting Social Security benefits before reaching your usual (Full) retirement age, your monthly payment may be cut by up to 30%. In addition, if you begin collecting early and continue to generate income that exceeds the annual earnings limit, you will be penalized.
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The Longer you Claim Your Social Security Benefits, the Larger the Amount You May Claim
On the other hand, if you wait until after your typical retirement age to claim Social Security, you will receive a larger monthly payout. How much more is there? If you were born between 1925 and 1942, your monthly Social Security income will increase by 0.29% for each month past your usual retirement age, and it will increase by 0.67% if you were born after 1942. This equates to 8% per year.
So, when should you call it quits? Should you consider retiring early? Late? Have you reached your normal retirement age? This is determined by your financial situation and your life expectancy. You may choose to retire early if you have a substantial pension or assets.
In addition, if you have a family history of living a long life, you will be paid more if you delay getting benefits. For example, if you believe you won’t survive past the age of 80, you should start collecting Social Security at the age of 62. However, if you anticipate living past the age of 82, consider delaying when you begin receiving Social Security payments.
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