We all pay Social Security taxes when we work for an employer. This money goes into a big pot that individuals, such as those who are disabled and those who are retired, can draw upon to receive money with which to augment their living expenses. There is an expectation, these days, that when you pay into Social Security, you are immediately entitled to the money upon your retirement. You paid into it; why shouldn’t you get your money back when you need it? While the money is there for those that need it, one of the biggest mistakes that individuals make is to start drawing on Social Security benefits too early even though their retirement plan doesn’t dictate the need.
When is the right age?
While you become eligible for Social Security benefits at age 62, drawing on them that early means that you will receive the lesser benefit that will not grow as much as if you wait to utilize Social Security when you are eligible for the full benefit at roughly age 66. So the question is, when is the best time for you to start utilizing Social Security benefits between the ages of 62 to 70 based on your retirement plan? This is a very individualized question because there is no right answer for everyone.
Perhaps you’re 64 years old and you don’t make a lot of money and have minimal retirement savings. Even though waiting two years could mean that you get larger payments, you may need to start drawing on Social Security immediately. But perhaps you’re 62, you have a good savings and plan to work part-time. Perhaps you also have very good health, then you would want to wait until age 66 to start drawing on your Social Security benefit in order to receive larger payments. As we mentioned, this is a different decision process for every individual. If you need help figuring out how your Social Security benefits fit into your retirement plan, contact Income for Life today!