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Hi! I'm the contributor to Motley Fool, Dan Kline, and in this FAQ episode we're looking at when you should take Social Security.
Before you ask when you should apply, see when you can apply. You can start claiming at age 62, but to get your full social security benefit, you have to wait until your retirement age. It's 66 years old for people born between 1943 and 1954. For people born between 1955 and 1959, you will have to wait a few more months and for those born after 1960, the age of retirement at age 100 has risen to 67 years.
To make matters worse, you do not have to retire when you reach retirement age and you do not pay. If you can wait at least another year after age 66 or 67 depending on your retirement age, you will receive an additional 8% of benefits for each year between 66 (or 67 depending on your age) that you expect to submit. your request until the age of 70 years.
In addition to these calculations, there are also different considerations for a married person who does not work long enough (or earns enough money) to earn a lot of social security checks. People in this category can retire at the age of full retirement with half of their spouse's benefits. If, however, they choose to retire at age 62, this amount can be reduced by up to 35% – 8.33% for each of the first three years and 5% for each additional year.
It should be noted that the spouse does not obtain a lesser benefit from his spouse when this method of claim is used. And, in the case of the death of the spouse with the highest income, the surviving member of the couple can go from the half-share to a survivor benefit, which is usually the total amount the spouse received.
This, of course, only covers the moment when you can start collecting Social Security and not when you should. When deciding when to receive benefits, you should consider the following:
1. How long can you continue working?
2. How much did you save?
3. What will your expenses be at retirement?
4. Are you in good health?
When deciding when to reach social security, you need to honestly consider your finances, savings, work situation, and post-retirement expenses.
The sooner you file, the less you receive, but it is a mobile scale. You lose 6.67% a year for the first three years if you retire between age 62 and 65. During the year or the next two years (depending on the age of retirement, 66 or 67 years for you, you will lose 5% per year). you claim your benefits quickly (with a maximum loss of 30%).
In other words, you collect more money each month if you can postpone retirement to 70, but that may not be the right decision for everyone.
If, for example, you have saved enough to make Social Security not a big part of your retirement income, but your health is not healthy, you can consider claiming at age 62 to maximize the number of 39 years that you collect.
Unfortunately, this scenario does not apply to most Americans. In fact, a recent TransAmerica study showed that 66% of American seniors thought that social security would be their main form of retirement income. This is a scary figure, because social security generally only replaces about 40% of a person's pre-retirement income.
For most Americans, unless you have saved well for retirement or your health is in poor health, it is wise to delay benefits as much as possible. If you continue to work until you reach retirement age, it will take you another four to five years to earn money without spending your retirement savings. If you can continue to work until age 70, you will increase the amount of your social security benefits by 24% to 32% depending on your retirement age – and that's a big difference.
Of course, if you can not work or if you have stopped working because you have planned your retirement well, it may be wise to ask for compensation sooner. The same is true if your health prognosis suggests that you do not have many years in front of you.
When claiming social security is a very personal matter, but the general solution for an average American with no major health problem is to defer it for as long as possible.
If you wait, you can maximize the size of your monthly check and, hopefully, live long enough to reap more than you would have done earlier.
Thank you for watching this video!
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