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Deciding When to Collect Social Security
Now
or Later? Full
benefits are available at "full retirement age," which ranges from 65
to 67, depending on year of birth. Those born prior to 1938 reached this stage
at age 65. But an individual born in 1950 will have to wait until age 66, and
someone born in 1960 or later will have to wait until By delaying benefits up to age 70, people can receive a higher benefit amount to reflect delayed retirement credits. Comparing
the Numbers At first glance, it might seem that waiting until age 70 may be the wisest decision, because a 70-year-old retiring today would receive up to $689 more per month than the reduced benefit amount at age 62. That could add up to $8,268 a year! However, by waiting, the individual would not have received eight years worth of reduced monthly benefit payments, which would add up to $136,512 ($1,422 monthly benefit times 96 months).³ The table on page 1 illustrates the breakeven point at various ages. Deciding when to begin receiving Social Security benefits has long-term implications. Only after carefully considering a variety of factors — including age, health, and financial situation — should you begin taking out of a system in which you've spent much of your career contributing a percentage of your salary. 1) AARP,
2002 |
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Social
Security is the principal source of retirement income for about two-thirds of
older Americans.¹ Its importance to so many people may explain why deciding
when to start collecting Social Security benefits can be difficult. Starting
benefits at age 62, full ("normal") retirement age, or age 70 has
different income consequences that will last throughout retirement.
