Should I wait to take Social Security?
As much as 8% a year extra can make a huge difference. Here’s how.
Your monthly Social Security retirement benefit depends on your age when you first start collecting. Waiting until after you reach your Full Retirement Age (FRA) to begin collecting Social Security benefits kicks in the Delayed Retirement Credit.
After your FRA, Social Security applies a delayed retirement credit of up to 8% per year. You may receive your largest benefit by delaying until age 70. The benefit increase no longer applies once you reach age 70, even if you continue to delay taking benefits. Don’t delay after 70!
If you begin receiving benefits before your FRA, you will receive a reduced benefit. You can start benefits as early as age 62, but doing so can result in a reduction of as much as 30%.
Here’s an example: Joe will receive $1,500 monthly in Social Security benefits at his FRA of 67. If he claims at 62, five years before FRA, then his benefit is $1,050 reduced by 30%. On the other hand, if Joe waits and files at 70, his benefit increases to $1,860 up 24%. A huge difference when this becomes lifetime income!
Your decision of when to claim your Social Security benefits is very important and will have a big impact on your retirement planning. There are numerous factors that impact your decision. This is not something you want to do yourself, but should discuss with a financial professional who can help you weigh all the factors.
Of course we want to make smart money decisions, but the best course is not always about the money.
As always, we are here to help create your best 2nd Half.
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1-419797 9/16/2016
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
All illustrations are hypothetical and are not representative of any individual’s specific situation.
