Social Security: Why Wait?

| June 26, 2019
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Financial Plans & Strategies understands that each client’s situation is different. As each client approaches retirement, we analyze the decision on when they should start taking their social security income benefit. We factor in our clients’ health, other retirement income, death benefit, and estate planning issues into each individual situation when making this determination.

 

Full Retirement Age by birth year:


 
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Delaying Retirement

If you decide to delay starting social security beyond your full retirement age, the following chart details the annual increase you will receive until it is capped at age 70. The benefit increases by a certain percentage for each month you delay receiving benefits.

 

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Retiring Early

If you’ve earned 40 credits, you can start receiving social security benefits at age 62 or at any month between 62 and full retirement age (“FRA”). However, your benefits will be reduced based on the number of months you start benefits prior to your full retirement age. For example, if your FRA is 66, the following table applies:

 
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Keeping in Mind Longevity

One final aspect to consider is your family history of longevity. You may need your income to last for a long time because people are living longer than ever before.  

The typical 65-year-old today will live to age 83; one in four 65-year-olds will live to age 90; one in ten 65-year-olds will live to age 95. Generally, women tend to live longer than men. (2)

Avoiding the Medicare Penalty

Even if you don’t plan on signing up to receive social security benefits, be sure to sign up for Medicare three months before turning age 65. You should definitely sign up for Part A, which is free. If you don’t sign up for Medicare Part B (medical insurance) when you’re first eligible, your coverage may not start right away, and you may have to pay the late-enrollment penalty (unless you are covered by group health insurance and your employer has completed the verification form).

 

You can apply for Medicare online at www.socialsecurity.gov/medicareonly.

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2. https://www.ssa.gov/planners/lifeexpectancy.html

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