On Aug. 14, 1935, President Franklin D. Roosevelt signed the Social Security Act to help fight unemployment and guarantee income for retirees. While Roosevelt acknowledged the limitations of the act, saying, “We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life,” the goal was to prevent older Americans from living in poverty.
Many Americans now think that retirement automatically happens when they reach age 65. Not necessarily! While some can afford to retire earlier, others may want to work longer to save more. Regardless of when you want to stop working, you may want to consider delaying taking Social Security benefits if possible.
Baby boomers (those born between 1943 and 1954) are eligible for full Social Security benefits at age 66, but they can begin claiming a lower amount at age 62. Those who wait to apply for Social Security benefits until age 70 can receive up to 8 percent more per year, whichcould almost double their monthly benefit income. Potentially the worst possible outcome is for those who claim their benefits before reaching full retirement age, but then return to the workforce; they risk having their benefit reduced from claiming early, and then even further if they earn too much when they work again.
In 2022, the maximum Social Security benefit is $3,895 a month at the normal retirement age, which varies depending on your birth year. Want to test if you can afford to wait until age 70 to receive the full amount? Practice living on a retirement budget that excludes all Social Security benefits for at least six months.
Instead of waiting to decide what to do at age 65, take the time NOW to practice and examine your budget options so you can be sure to make the most of your benefits. Our office will work with you to examine all of your options to help you enter retirement at the time that works best with your budget. If you are wondering about your retirement benefits, call our office today for a review of your portfolio. We’re here to help you confidently transition from the workforce into retirement.
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Can You Wait to Take Social Security?
November 21, 2021