Retiring and Taking Social Security
As of 2013, full retirement age is 66 for anyone born in 1943 or earlier. Born between 1943 and 1959? Full retirement will be at age 66 plus two months depending on what date your birthday falls. If you are like me, born after these dates, full retirement is age 67. The big question now – should you take social security at 62 or wait until full retirement age in order to get a larger monthly benefit? Here are a few examples you may want to consider when retiring and taking social security.
For Example: Individual born between 1943 and 1954
Full Retirement = age 66
- Taking retirement early?
$1000 monthly benefit would be reduced 25% to $750 per month if retiring early at age 62. This individual will collect $36,000 in benefit by the time they reach 66.
- Retiring at age 66?
Forgo the $36,000 to receive the higher monthly benefit at 66, and receive a monthly $250 difference in the benefit.
Conclusion: If you divide $36,000 by $250, it will take you 12 years in order to break even. So, it is important to calculate the numbers and see what makes sense in your particular situation.
Another Consideration: Available Spousal Benefits
- Taking Retirement early? You could be shortchanging your spouse.
Conclusion: Sometimes it’s better for the spouse to claim the higher benefit of the spouse with higher income. If a spouse passes away and both were receiving checks, the surviving spouse keeps the higher of the two checks and loses out on the other. When you lose a spouse, income actually goes down. This is something that one should take into account.
This article does not include all items to be considered when retiring and taking social security. Consult an advisor who specializes in retirement planning and can guide you on maximizing social security to your advantage. To request our free guide, “The Social Security Decisions,” call us toll free at 877-213-7233. You can also request the guide online by clicking here.
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