Pick Best Time to Claim Retirement Benefits
You’ve been paying automatically into Social Security your entire career. When it comes to collecting, there are hundreds of ways you can file.
But deciding when to take retirement benefits is like betting on your death, and the Social Security website doesn’t make it easy. To help you determine your optimum age, AARP has launched a new calculator. It’s part of AARP’s new “Ready for Retirement?” effort.
More than half of retired workers claiming benefits in 2009 chose to begin at age 62, according to AARP. But that decision comes at a cost—lower monthly benefits, which can lower your lifetime retirement income by as much as 8% for every year you claim before reaching full eligibility age.
“Our research shows boomers are worried about retirement, because they don’t feel prepared,” said Kent Sovern, AARP Iowa State Director. “Choosing to claim benefits early–or later–is a very personal decision made more difficult by the weak economy. With health, employment, lifestyle and savings to consider, no one age is right for everyone. However, the later you decide to claim, the greater the potential benefits may be.”
AARP’s retirement calculator uses a simple, question-and-answer format to estimate both monthly and lifetime benefits across a range of ages. You can calculate spousal benefits and take into account the impact of continuing to work while collecting benefits. You can also compare estimated monthly benefits to expected expenses in retirement and print a personalized summary report.
Social Security comprises 50% or more of the retirement income for 6 in 10 older Americans. To calculate benefits, the Society Security Administration uses a formula that averages 35 years of your wages. (For years you didn’t work, enter zero.) Find an explanation here.
AARP, a nonprofit, nonpartisan organization that helps people 50+ have independence, choice and control in ways beneficial and affordable to them and to society, provides retirement guidelines at www.aarp.org/ReadyforRetirement.
Written by kprather on Monday February 29, 2016