For all but the ultra-wealthy, Social Security benefits will play a part in your retirement cash flow planning. Under its original design, it was meant to replace about 1/3 of the average persons retirement cash flow needs. Without proper planning it may end up being a larger piece of one’s retirement income.
As retirement approaches, estimating income for the retirement years is critical in planning for living and leisure expenses. It is suggested to request an updated Social Security Statement which estimates the projected benefit payments at different ages. As more people have been working longer than expected before retiring, the additional income can increase Social Security benefits.
The earliest one can take Social Security is age 62, which pays a lower benefit than waiting until full retirement age of 66 for those born between 1943 and 1954. Full retirement age increases gradually for those born between 1955 and 1960 until reaching age 67. For anyone born 1960 or thereafter, full retirement age is 67.
In order to request your estimated benefit payments, the Social Security website provides friendly calculations and estimates based on your most current tax year filing. Simply visit https://www.ssa.gov/myaccount/retire-calc.html
Source: ©OneBlueWindow, LLC, www.ssa.gov