Social Security

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 67; 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 example: Suppose your full retirement age benefit is $2,500 per month. If you begin collection at age 62, your benefit would be approximately 70% of your full retirement age benefit or $1,760 per month, and by age 90, you would have collected approximately $695,000 in benefits. If you wait until age 70 to begin collecting benefits, your monthly benefit would be 24% greater than your full retirement benefit, or $3,100 per month. As a result, at age 90, you would have collected approximately $747,000 in benefits.

As this example illustrates, the longer you live, the more potential for increased Social Security benefits comes from delaying your claim. However, what if you start to develop health issues prior to claiming your benefits? Given the complexity of individual circumstances, creating a personalized financial plan that accounts for all aspects of your financial situation is essential to achieving a successful retirement.