76% of Older Americans Do not Know This Vital Number of Social Security – Motley's Fool

Millions of seniors depend on social security to pay their bills in retirement. This is why it is constantly advised to recipients to maximize these benefits as much as possible. However, this requires, at the very least, basic knowledge of the functioning of social security. And the new Nationwide data reveals a glaring knowledge gap among older Americans who are approaching retirement.

Only 24% of the elderly can identify their retirement age for social security purposes. And without this vital information, Americans may file at the wrong time and significantly reduce their benefits.

Your retirement age is important

Although your social security benefits are themselves based on your 35 best paid years, the age at which you report them will determine the amount you collect each month. If you turn up at retirement age, or FRA, you will receive the exact monthly benefit to which your earnings record entitles you. Your FRA is based on your year of birth, as follows:

DATA SOURCE: ADMINISTRATION OF SOCIAL SECURITY.

Now you certainly do not have to ask for benefits from FRA. In fact, you are allowed to file social security claims as early as age 62. For each month prior to the FRA, however, your monthly benefit will be reduced to a maximum of 30%. In addition, no matter what reduction you face by filing early, it will remain in effect until the end of your days, unless you withdraw your application and refund the money you had received at the Social Security Administration within one year. Since this is a difficult thing to do, it is best to assume that the monthly benefit you start with will match the amount you keep for life.

You can also delay social security beyond the FRA and accumulate credits that increase your benefits by 8% per year. However, this incentive expires at age 70. The maximum increase you will get is 32% if your FRA is 66 and you wait until you turn 70.

If you are approaching retirement with little or no savings, it is best to wait at least the retirement age to at least avoid a reduction in benefits. Even if your savings are in a healthy place, having more money in retirement certainly does not hurt, especially if you take into account strangers such as health care that could cost more than expected .

Now, in some cases, Is logical to claim social security before the FRA. For example, if you lose your job and have no other way to pay your bills, you'd better apply for benefits instead of paying expensive debt, even if it meant reducing your bills. your monthly payments. In addition, if your health is bad and you do not plan to live long, it is usually beneficial to start collecting benefits early on to get more Social Security money into your life.

In addition, if you have saved well for retirement and therefore do not pay your bills with social security, you can choose to apply for benefits before the FRA and use this money to travel or enjoy life when you are relatively young. In any case, the key is to make an informed decision, which you can not take without knowing your retirement age. If you do not know this number, record the information above. Otherwise, you risk getting benefits at the wrong time and suffering financially because of this for the rest of your life.