Once you begin receiving your Social Security income benefits, it can be very expensive to change your start date.**
It is a good idea to put in a lot of thought, and perhaps even a pencil to paper, before making the final choice. You can either receive a permanent 25% cut or a 32% increase, depending on when you choose to begin receiving your benefits. If you begin at age 62, you will receive 25% less than you would at the full retirement age (FRA) of 66. If you can wait until age 70, you could receive 32% more than at age 66.
As an example, consider the case of a person retiring at age 62 this year. If he/she begins taking social security at age 62, his/her monthly amount will only be $1,332/month. Waiting until FRA (age 66), he/she will receive $1,850/month. If he/she is fortunate enough to be able to wait until age 70, his/her monthly income will begin at $2,553/month.
In contemplating these options for yourself, you have two big questions to answer:
- How long will I live?
- Will I have enough other income should I decide to wait?
For instance if you live to age 80, you will have received more in total benefits by beginning at age 70 than if you had started your benefits at age 62.
If you are considering the options, give us a call or email. We’ll be happy to review some numbers with you at no charge or obligation. We’re just glad to help!
*Nationwide Financial Retirement Institute survey as quoted by Investment News June 9-13, 2014
** http://www.ssa.gov/retire2/withdrawal.htm. If you change your mind within 12 months you may be able to change to a later start date, but you would need to pay back all you received.