The earliest age you can sign up to receive retirement benefits is 62, but many seniors wonder if that is the ideal time to sign up. There is no right or wrong answer, but you should know that claiming your Social Security benefits early can cost you in the long run. It is extremely important to educate yourself in order to know all of your options and make the best decision possible. Your decision will affect the rest of your life, impacting the funds you receive every month.
Benefits will differ greatly depending upon your age of enrollment in Social Security.
- A 62-year-old woman claiming/beginning her Social Security would receive $964 a month.
- Waiting until her Full Retirement Age (FRA), 66 years and 2 months old, her monthly benefit would rise to $1,300.
- Postponing the start of her benefits until the age of 70, she would receive approximately $1,700 a month.
In summary, the later you apply for your Social Security benefits, the larger your monthly payments will be. Boston College’s Center for Retirement Research states that the majority of us (over 40% of men and almost 50% of women), apply for Social Security benefits at the age of 62. Why? Perhaps, financially we need to.
As mentioned earlier, there is no “right” age to start receiving Social Security benefits. Everyone has a unique set of circumstances that need to be evaluated prior to making their decision. You must evaluate your health, cash flow and consider your family longevity.
When determining the best time to start Social Security benefits, here are a few action steps to consider:
- Capture current spending and saving habits to estimate future financial needs in retirement.
- Determine if working part-time in retirement is an option.
- Consider alternative financial options to Social Security.
- If there is equity in your home, you may be able to convert that equity into usable dollars with a Reverse Mortgage.
Consult with a financial professional before making your final decision. Most will recommend, if possible, postponing the activation of Social Security benefits until age 70. Waiting will provide you the best financial payout of funds from Social Security. For many seniors, financial advisors are recommending Reverse Mortgages as a way of funding the years between retirement and the start of Social Security benefits. As a whole, we are living longer, healthier lives. A married couple, aged 65, should plan for at least one of them living to the age of 90.
Consider all of your options when determining what your best age is to start receiving Social Security Benefits.
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