Once you’re nearing retirement, it’s time to start getting your financial affairs in order. After contributing to retirement accounts for decades, it’s time to start deciding your disbursements. If you qualify for Social Security benefits, it’s also time to decide at what age you should start claiming your benefits. If you’re asking yourself “when should I claim Social Security?”, continue reading to learn more.
There is not a specific “best age” to start claiming Social Security benefits. The decision is fully up to each person and their own circumstances. Your circumstances include your income needs, your health, your family longevity, if you plan to continue working in retirement, if you have other sources of retirement income, and more.
You can start claiming Social Security benefits at the age of 62 but you will only receive your full benefits once you reach full retirement age. The full retirement age is different depending on your birth year.
- If you were born between 1943 and 1954, your full retirement age is 66 years old.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 25%.
- If you were born in 1955, your full retirement age is 66 years old and 2 months.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 25.83%.
- If you were born in 1956, your full retirement age is 66 years old and 4 months.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 26.67%.
- If you were born in 1957, your full retirement age is 66 years old and 6 months.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 27.50%
- If you were born in 1958, your full retirement age is 66 years old and 8 months.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 28.33%.
- If you were born in 1959, your full retirement age is 66 years old and 10 months.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 29.17%.
- If you were born in 1960 or later, your full retirement age is 67 years old.
- If you claim Social Security starting at age 62, your retirement benefit is reduced by 30%.
However, the longer you wait to claim Social Security, the higher your benefits will be. You can delay receiving benefits until age 70. For example, if your full retirement age is 67 and that is when you decide to start claiming Social Security, your monthly benefit would be $1,000. If you delay claiming benefits until age 70, your monthly benefit will be $1,240.
You want to choose a retirement age based on what will work best for you. Once you start claiming Social Security benefits, you will receive benefits for the rest of your life. A third of 65-year-olds today will live until 90 years old. You need to choose a retirement age that will provide enough financial help to combine well with your other retirement income sources.
Making retirement income decisions can be difficult to do on your own. With the guidance of an advisor from Plan A Wealth Management, you can make an informed decision based on what would be best for you. Schedule a consultation with us today to get started.
Sources:
https://www.ssa.gov/benefits/retirement/planner/agereduction.html
https://www.ssa.gov/pubs/EN-05-10147.pdf
https://www.investopedia.com/retirement/when-take-social-security-complete-guide/