Many people retire around the same age as one another and they then claim their benefits upon their retirement. The Social Security Administration has a ‘full retirement’ age that people can follow in order to receive their benefits without any penalties. Although there is an average age and an age provided by the Social Security Administration, some people claim their benefits at different ages because it helps them and their specific situation. There are certain situations in when taking your benefits at a different age than the average can be better for you. Keep reading below to see what happens when you take your retirement at one age versus another.
The Social Security Administration says that the ‘full retirement’ age is 65 to 67 depending on the beneficiaries’ year of birth. Even though this is the age when you are supposed to receive your benefits without any penalties, a majority of people have opted to receive their Social Security at age 62. This is the earliest age a person can claim their benefits. You will receive at least 25% less than you would have if you waited until the ‘full retirement’ age. You will be getting about 70% of your monthly benefit when you claim them early because you will be getting the benefits for an additional 60 months.
It is optimal to wait until you are at full retirement age to claim your benefits. You will get all of your benefits given to you without having any of the money withheld from you. Once you reach full retirement age you will have the option to wait a little bit longer. Waiting until age 70 can prove beneficial because the Social Security Administration will increase your benefit by 8% per year. You can calculate just how much you will have upon claiming your Social Security if you know how much you have made throughout your working career as well as how long you have worked or will worked.
There are many reasons people choose to claim their benefits when they do. There are a few questions that you should ask yourself or your spouse before deciding when to get your retirement benefits. One of the questions you should ask is whether or not you are still working. If you are 62 and are still able-bodied and want to work, you should continue to work and continue to increase your benefits. If you are in a profession that includes a lot of physical labor and you are age 62, you may want to consider early retirement. This is because you may not be physically able to complete the tasks needed for your job. You may not be able to qualify for disability even though they are not able to work as well. This is also grounds to collect money early.
The Social Security Administration has an earnings limit of $15,720 as of 2015. You will lose one dollar in benefits for every two dollars you earn over this limit. These deductions do not occur if you work after reaching full retirement age. Working past that age can help you receive more benefits than you would if you took your benefits early.
One conversation that is unpleasant to have when thinking about Social Security is the age you think that you may pass away. If you think that you will have shorter lifespan, you may want to claim your benefits early. It would not make sense to delay your benefits longer if you will not be alive to enjoy them.
Picking when you should claim your retirement benefits could be a difficult choice. You will want to look at what age will be most beneficial to you, as well as ask yourself the essential questions that will help make the decision. Start looking early on in your career at your Social Security plan to decide what age will be the best for your retirement.