Currently, a worker gets a “full” Social Security retirement benefit at age 66. They can start collecting at age 62 and receive 75% of their full monthly benefit each month or wait until age 70 and get about 132% of their full monthly benefit each month.
About half of Americans start collecting Social Security benefits as soon as they are allowed to at age 62. Their decision to collect “early” is usually based to their need to access the funds to meet living needs.
For those Americans that don’t “need the money” to survive, there are several seldom-discussed planning strategies available. They are easy enough to implement once you figure out which strategy is the right one.
Want an example? Husband and wife are the same age and retire at the same time. Reflexively, they both start collecting Social Security benefits at age 66 because “that is when they are supposed to”. If they had put some thought into it, they would have learned that they could pull $70,000 more out of social security in their lifetimes if wife would have started to collect at age 62, husband would have collected a spousal benefit from age 66 to age 70, and then collect his full benefit at age 70. They actually start to get money at age 62 and end up getting more than if they would have waited until age 66…wonderful!
Wonderful, but complicated. Fortunately, we do this everyday and can look at a couple’s earnings, age, and expected longetivity, calculate 14 different scenarios and let you know which one makes the most sense for you. Usually the standard answer of waiting until age 66 to collect is not the best one for you.
Are you or your parents approaching 60 years of age…now is the time to talk.