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Claiming Social Security Benefits

August 07, 2014

Waiting to claim social security benefits could be a very lucrative investment.

Are you nearing retirement age and thinking about when and how to claim your social security benefits? This is a significant financial decision that will have long-term implications during your retirement. Below are some important considerations.

At what age should I claim social security benefits?

While it is tempting to start claiming benefits at age 62, in the long run it could be a huge advantage to you if you wait a few years until your full social security retirement age. At age 62, although you may start claiming benefits you are not entitled to your full retirement amount.

  • If you were born between 1943-1954, your full retirement age is 66.
  • If you were born between 1954-1959, your full retirement age is 66 plus two or more months.
  • If you were born from 1960 on, full retirement comes at age 67.

5 Important Considerations
Delaying social security benefits for as long as possible is generally recommended, especially if you are in good health and expect to live beyond your life expectancy. Since social security may be a large source of income during retirement, it is important to review the many different options available for both single individuals and married couples. There are helpful steps you can take, and questions you can ask yourself to ensure that you are securing the best financial status for yourself and/or your spouse.

  1. If you are not in immediate need for cash, and/or are still employed it is generally better to wait on claiming the benefits. The more money you make during your working years, the more you will receive when you retire!
  2. Starting your claim later than you planned can increase payments by up to 8% each year. Where else can you earn a guaranteed 8% return on your money?
  3. Strategize with your spouse. Following the death of a spouse, the living spouse will continue receiving benefits based entirely on the higher earner's record. The higher earner in a marriage should think about starting benefits based on how old he/she expects to be when his/her spouse expects to die.
  4. If you are divorced, make sure to investigate your options regarding claiming your benefits on your ex’s earnings history.

It is important to take the time to consider both you and your spouse's ages when it comes to planning for social security, as well as your physical health and other possible circumstances that may affect you. Your decision is an important one so be sure to strategize sensibly and map out the best possible options. For more information or guidance, please contact us.

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