Social Security Income Planning

What you need to know

If you’re 55 or older now, chances are you’ll receive the full Social Security benefit as it was intended. But when should you begin to take those benefits? What are you options and how do they fit into your financial planning?

Most people apply to take their Social Security benefits when they are first eligible. For most that could be a mistake that costs you in the long run. Why?

• The amount you get increases sharply the longer you delay starting benefits. Someone who would get $17,200 a year starting at 62 could boost her benefit to $24,600 (43 percent more) at her full retirement age of 67 or to $30,500 (77 percent more) at age 70.
• Frequently people live beyond the projected break-even point — where the amount they get from waiting exceeds what they would have collected by starting early.
• A premature start reduces survivor benefits that a widowed spouse may have to live on later in life.
• Starting early also precludes strategies that married people (and many once-married people) can use to boost their lifetime benefits.

Another factor, and the most difficult to grapple with, is life expectancy and its impact on your Social Security benefits.

As part of your retirement plan, we look at the various strategies and benefits of all Social Security income scenarios related to life expectancy.

You can start collecting Social Security at any age between 62 and 70. However, if you begin at these ages, your monthly benefit is generally:

• 62:Your minimum
• 66: At least one-third more
• 70: At least three-quarters more