As you get closer and closer to retirement age, you may experience a variety of emotions, ranging from excitement about your newfound freedom, to fear about what may come next. And surely, in addition to the many emotions you must be experiencing, you have also spent some time thinking about and planning how you will afford your costs of living once you stop working. For most people, the answer lies in a combination of things, including personal savings, retirement accounts, and of course, Social Security retirement benefits.
When you begin collecting your Social Security benefits is one of the most important decisions that you make, and could make a huge difference in terms of the amount of money that you are able to collect over time. If you live in Lake of the Four Seasons, and are approaching retirement age, make sure you understand the following:
Did you know that how much you will receive from the Social Security Administration in retirement benefits each month changes depending upon the age that you are when you retire?
The first thing that is important to know is what your full retirement age is. Your full retirement age is the age at which, if you begin collecting benefits from the Social Security Administration, you will receive 100 percent of your benefit amount. Your full retirement age depends on the year that you were born. For example, for people born between 1943 and 1954, the full retirement age is 66.
However, the full retirement age is not the age at which you are permitted to start collecting benefits; rather, it is the age at which you will receive your full benefit amount. To be sure, you may start collecting your benefits as early as age 62. You also can wait until age 70 to start collecting benefits.
The earlier that you start collecting your Social Security retirement benefits, the lower your monthly benefit amount will be. For example, your monthly benefit amount could be reduced by 25 percent if you start collecting your benefits at age 62.
In the same vein, if you wait until after your full retirement age to begin collecting your benefits, then your benefit amount will increase.
Based on the information above–that your benefit amount will be less if you collect early than if you delay collection–you may assume that delaying collecting is always ideal. However, this is not the case; if you are not expecting to live for very many years, as may be the case if you have a particular health condition, claiming your benefits early may be very helpful. In other cases, you may have no choice but to start collecting benefits, especially when you do not have another source of income to support your costs of living.
Knowing when you should start collecting benefits can be confusing. Fortunately for those living in Lake of the Four Seasons and surrounding areas, Harvest Social Security QA hosts free workshops for the community where you can learn more from financial professionals. You can sign up for a workshop online today.
How did we do?
Note: Your review may be shared publicly.