
Understanding Social Security: Key Ages and Benefits (And Why Waiting Can Be Worth It)
Oct 2, 2024
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1. Important Ages: 62, 67, 70
- Age 62: You can start receiving Social Security benefits at 62, but your monthly payments will be reduced. For example, if your full benefit at 67 would be $3,000 per month, starting at 62 might reduce it to $1,200. Think of it as getting a smaller paycheck earlier. - Age 67: Full Retirement Age (FRA) is 67, where you get your full benefit amount. If you wait until 67, you’ll receive the full $3,000 per month. This is the age when you get what you've earned.
- Age 70: If you wait until age 70, your benefits will increase by 8% each year after 67. So, if you wait until 70, your monthly benefit could be about $3,720. This is like getting a bonus for waiting.
2. Why Waiting Can Be Beneficial
- Each year you wait past your FRA until age 70, your benefit increases by 8%. For example, if you start receiving benefits at 70 instead of 67, your monthly check could be $3,720 instead of $3,000. By waiting, you're essentially giving your future self a raise.
- Delaying benefits can provide more money during your retirement years, giving you better financial stability and peace of mind. It's like building a stronger financial safety net.
3. How to Retire Before 67 Without Using Social Security Right Away - Use Other Income Sources: If you have savings, a pension, or part-time work, you can use these to support yourself. Imagine retiring at 62 but relying on your pension and savings until you start Social Security at 67. This strategy helps keep your future benefits intact. - Withdraw from Retirement Accounts: You can use money from 401(k)s or IRAs. Picture retiring at 63 and using your 401(k) funds until you claim Social Security at 67.
4. Spousal and Survivor Benefits
- If you are married, it can be beneficial for the higher-earning spouse to wait until age 70 to claim benefits. For example, if one spouse earns more, they wait until 70 to maximize the benefit. If one spouse passes away, the surviving spouse receives the larger benefit. This strategy can provide added security for your loved one.
- Spouses can also claim benefits based on the higher earner’s record, providing more financial stability for the family. It's a way to ensure that your family is taken care of.
Understanding these basics about Social Security can help you make better decisions about when to start your benefits, ensuring you get the most out of your retirement income. Making the right choice now can help lead you toward your financial future.
Schedule a consultation with our team today to tailor a strategy that best fits your retirement goals. Contact us now to get started!
Poll:
When do you plan to start taking your Social Security benefits?
- At age 62
- At age 67
- At age 70
- Undecided