The earliest you can start receiving your social security is at age 62, full retirement age is 66 (for people born between 1943 and 1954), and the latest you can delay it is until age 70.
At full retirement age 66 you’re entitled to 100% of your amount, but if you take it early at age 62 you receive 75% of that amount. If you wait until age 70 then you get 132% of the full retirement amount.
So, when should you take it?
Let me just say there is no exact right time to take it that is applicable for everyone. For one client’s circumstances it might make sense to take it early, but in another it makes sense to wait.
If you live a long life and you draw upon other sources of income until age 70, then it becomes very attractive to wait. But, we don’t know if you’ll live a long life until after the fact, so there is some supposition around this.
Less than 2% of people wait until age 70, but mathematically that’s the best option (76% more than what you’ll receive if you take it at age 62), and that’s 76% more each year just for waiting 8 more years.
Do not do anything without talking with a financial professional to review your specific case. I run calculations and advise on this all the time, so I’m quite familiar in the various options for clients.
Please contact me if you feel I can help you with your social security planning.
At age 62, you receive 75% of what you’d receive at your full retirement age (assuming 66). If you delay until 70 years old, you accrue 8% more per year (32% over 4 years).
In general, I usually recommend waiting until 70 to start your social security, but this is also assuming a long life.
When you’re looking at social security planning for couples, I have a program on my computer that can track all the permutations (file and suspend, delay, spousal benefits), etc.
One of the advantages of having a retirement plan is that you start to understand where your sources of income will be upon retirement, and how much.
Unfortunately, there is a perception by many Americans that Social Security will be a bedrock of their retirement, when in fact it is just a complement, and usually a small one at that.
According to the Congressional Budget Office, someone retiring at 65 today will receive 43% of his/her annual income from Social Security. Where does the rest come from? Your investments and savings, additional job, or significantly reduced standard of living.
Which would you rather have? Call me if you need help determining a retirement strategy.
A number of years ago the Social Security Administration started to mail out statements every 2 years near your birth date.
This is great for your financial planning.
I recommend you review this every time you receive it, and you can even get different iterations based on hypothetical future earnings right at the Social Security site.
I highly recommend a retirement analysis, and part of that analysis has to be projected Social Security benefits.
