Social Security

Social Security is one of many resources that may be available to you in retirement.

Retirement benefits can begin as early as age 62 or be delayed up until age 70. So how do you determine when you should begin to collect?

When it comes to social security perhaps the most important question is when should I start collecting my retirement benefits. First let’s review some social security basics. Your Social Security benefit is usually expressed in terms of the amount you would collect at full retirement age, which for current retirees is age 66; however you can choose to collect benefits as early as age 62, or you can choose to delay receiving benefits until age 70, and the longer you delay the higher your benefit.

Consider this simple example, suppose your full retirement age benefit is $2,500 per month. If you begin collection at age 62, your benefit would be 75 percent of your full retirement age benefit, or eighteen hundred and seventy five dollars per month, and by age 90 you would have collected approximately six hundred and thirty thousand dollars in benefits. If you wait until age 70 to begin collecting benefits, your monthly benefit would be 32% greater than your full retirement age benefit; or 33 hundred dollars per month. As a result by age 90 you would have collected approximately 792 thousand dollars in benefits.

So as you can see delaying Social Security can provide a significant retirement benefit. In fact there is no annuity product available in the private marketplace that we are aware of that provides a comparable guaranteed lifetime income benefit that also Rises with inflation, so assuming you have the means and your life expectancy is sufficiently long we strongly urge you to delay collecting Social Security. Just make sure this decision is made in the context of a well thought-out, comprehensive financial plan that takes you to count all of your resources and your entire financial situation.