EDL will begin this article by answering some questions like what is the full retirement age for social security benefits, what if I delay receiving benefits, or what if I want my benefits early? Then we will dive into the issue of when to take your benefits and financial impact it will have. EDL will discuss other factors that may impact your decision process too.
Lets get started. The standard full retirement age (FRA) is 66. The average benefit amount is $2,180.00 per month.* What if an individual wants to delay taking their benefits? How much will the monthly income go up? The answer is if an individual waits till 70 years-of-age, they will roughly receive $2,880.00 per month.* So you will gain around $700 waiting another four years from FRA. Now what if an individual wants to receive their benefits earlier than FRA? The answer is if a person takes their benefits at age 62, they will roughly receive $1,623.00.* So taking your benefits early will be around a $557 loss from FRA.*
Only you and the ones closest to you can make the best educated decision for you individual circumstance. However EDL will provide some factors that may impact your decision. When considering when to take you social security benefits, EDL thinks one of the main factors is health. This is very subjective/individual to the person. If your health deteriorating at the age of 62, then you might want to think about accepting your benefits sooner rather than later. On the other hand if you health is really good and you feel really good too you might want to delay accepting your benefits until later.
However another factor to consider when accepting your benefits at a particular time is how much money, if any, you have saved. What do you want to leave your loved ones with? Do you have a big nest egg or are you relying solely on your benefits? Can you realistically live off of $1623 a month? Do you have expensive medication to pay for or will you in a couple of years? Do you have to go to the doctors often (expense)? Do you have therapy or will you in the future (expense)?Evaluating your health at age 62 and your finances will better assist you in your decision. These issues and questions should be considered along with others.
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EDL hopes this short article helps and is of assistance to you and others.
*Reichenstein, W., & Meyer, W. (2013). Social Security Basics: Financial Planning. AAII Journal, 1, 11-15.