When You Should Start Collecting Social Security
- Author Denisa Tova
- Published November 12, 2011
- Word count 506
Should you start collecting Social Security immediately or hold out a few years for a bigger check?
Your decision boils down to two options:
1.Lower monthly payout for more years
2.Higher monthly payout for fewer years
Which is better for you?
Dollar-wise, if you wait until your normal retirement age (NRA) when you are eligible to collect your full retirement benefit, your payout will be about 30 percent larger than if you start collecting social security at age 62. At age 70, your monthly check will be even bigger. The NRA can differ from age 65 to age 67 depending on when you were born.
For example, Joe is 62 years old with a 20-year life expectancy. If he starts collecting at age 62, he will receive $1,799 a month. If he waits until his NRA of 66, he’ll increase his monthly paycheck by $500. If you simply multiply each annualized benefit by his life expectancy (20 years at age 62, and 16 years at age 66) he would be better off waiting, right?
Right! Unless he has special circumstances that would benefit from an immediate influx of cash. These numbers do not take into account real life expectancy, cost of living adjustments or opportunity cost.
Now, let’s talk about a few lesser-known Social Security planning opportunities:
Love Will Keep You Together . . . and Give you Higher Social Security Checks
It’s true! If you have been married for at least 10 years, you can collect benefits on your spouse’s record. What does that mean? You receive half of your spouse’s benefit if it is greater than your full benefit.
Here’s an example: John is eligible to receive $1,600 per month at age 62. His wife, Marlene, is only eligible to receive $660 per month. Social Security will compare their benefits and adjust Marlene’s to equal half of John’s — $800. And the adjustment does not take a bite out of John’s benefits.
Taking Turns
Here’s another great tip: When you and your spouse reach full retirement age, you can choose to collect on your spouse’s record (spousal benefit) and let your own benefit continue to grow. When you hit 70, you can start collecting your own, larger benefit (it had a time to grow).
Lastly, you aren’t stuck with these decisions. It’s OK to change your mind. Gary started collecting his Social Security benefits at age 62 to pay off some debt. Six months into it, he wishes he could reverse his decision. He can. Gary can return the benefits he has collected to Social Security and wait for a higher payout when he hits 70. And it’s INTEREST-FREE.
But there is a caveat. The Social Security Administration has recently tightened the rules about the interest-free loans. According to the new rules, you can change your mind and withdraw your application for retirement benefits within 12 months. You are also limited to one withdrawal per lifetime.
The bottom line with Social Security is individual circumstances will dictate your ultimate choice. Use the information in this article to make an informed decision and maximize your Social Security dollars.
Denisa Tova MBA, CFP, CFDP(TM), ChFC, CLU provides divorce financial expertise to divorcing individuals. She is a Certified Financial Planner(TM) practitioner and Certified Divorce Financial Analyst. You can find more information about Denisa Tova at: http://www.denisatova.com
Reprinted with permission of The Colorado Springs Gazette
Article source: https://articlebiz.comRate article
Article comments
There are no posted comments.
Related articles
- The Transformative Power of Yamaigel’s Certified Gel Eye Masks
- Checking account with cell phone protection!
- Keeping Cool This Summer: Air Conditioning Installation Services in Milwaukee
- A DIY Guide to Fixing Your Garage Door (with a Call to Garage Door Magnolia When All Else Fails!)
- Can a Bent Garage Door Be Bent Back into Shape? Don't Panic, Call Kiki Garage Door!
- How Can I Tell If My Garage Door Opener Sensor Is Bad?
- Maximizing Profitability: The Economics Behind Customizable Design Assets
- Exploring the Hidden Gems of Si Racha, Thailand
- DIY vs. Professional Movers: Pros and Cons in 2024
- MK Web Celebrates Top Position in Bourne's Premier Web Design Rankings
- The Road to Sobriety: Understanding Substance Use Disorders
- MotorKote Ultimate 40/60 Synthetic Hyper Mix 5W-30
- Exploring Denver on a Dime: A Frugal Travel Guide
- Top 10 Ways Production Scheduling in Business Central Transforms Manufacturing
- Strength Training and it's Incredible Benefits for Fat Burning
- Enhancing Home Security with Aluminum Shutters: A Focus on Weatherwell Elite
- 5 Easy Ways to Make Oral Hygiene Fun for the Whole Family
- Transforming Plastic Extrusion Machines into Recycling Powerhouses
- Unraveling the Potential of Plastic Extrusion Machines
- The Rise of Plastic Recycling Machines: A Step Towards Sustainability
- Strawberry Cheesecake Ice Cream: OMG! Unreal!
- The Advantages of Using Professional Home Cleaners in Ilford
- 8 Compelling Reasons to Hire Professional Home Cleaners
- The 12 Steps Narcotics Anonymous Program To Recovery
- Send Money to Tanzania: Effortless Transfers with SafariRemit
- Stylish Savings: 10 Frugal Ways to Stay Fashionable in 2024
- Fly Cheap With FlightPapa To Any City
- How Collaborating with a Software Development Company Can Propel Your Business Forward
- A Comprehensive Guide to Choosing the Best Hair Transplant Method
- 15 Frugal Tips for a Memorable Wedding Day