Use our calculator to determine your full retirement age. Sep 18, 2012 guys this is simple arithmetic and to me its a no brainer which way to go. When i first started planning for my retirement in my 20s, i anticipated being on my own without a pension or social security. Social security is a yearbyyear or monthbymonth decision. This article takes a long hard look at these three facts about social security filing age and shows the real math behind them. Taking social security at 63 or 66 page 4 aarp online.
If you claim social security at age 62, rather than waiting until your full retirement age fra, you can expect up to a 30% reduction in monthly benefits. The following is an excerpt from my book social security made simple. The conventional advice about when to take social security is try as hard as you can to wait. The social security administration makes one such calculator available on its website, but it doesnt analyze a variety of options or show you what claiming choices will result in you. Given these assumptions, the net present value of our hypothetical retirees total social security benefits would be 0.
Detailed calculator powerful calculator you download to your computer. I am planning to retire this year after my 63 birthday. They make this decision without understanding the long term consequences. Carefully weigh your options to get the best return on your money. The ssa has several handy calculators you can use to estimate your own benefits. Dont lose out on valuable benefits by collecting social security too early. The earliest you can begin receiving benefits is at age 62. Breakeven analysis offers insight into whether it pays off to take social security benefits early. Social security break even calculator vystar investment.
But in reality, the decision should be made stepbystep along the way. You can start taking it as early as age 62 or earlier if you are a survivor of another social security claimant or on disability, wait until youve reached full retirement age or even until age 70. Social security calculator 2020 update estimate your. Take full retirement benefit no more or no less at age 67. Does this have an impact on when and how much i will receive from social security after age 62. Ive also learned that i can choose when to begin taking these benefits. For security, the quick calculator does not access your earnings record. So someone taking social security at 63 instead of 62 would catch up at age 74. For some people, claiming social security at age 62 isnt so much a choice as a necessity. If you were choosing between age 63 and 66, for example, the break even point is age 77. Social security retirement benefits and related planning topics explained in 100 pages or less. I could forgo social security and use dividends and maybe dip into savings to make up the difference between expenses and pension. The 1 chart you need to decide when to take social security benefits dont miss out on thousands of dollars by claiming benefits at the wrong time.
En espanol let the social security calculator help you figure out how much retirement income youll receive at different claiming ages so you can determine when you should claim social security. Now that im getting closer to retirement age, i realize that i may receive some retirement benefits through the social security administration. You can start collecting retirement benefits as early as age 62. If you can wait a few years longer, you can boost your benefitsand your spouses. Social security is a yearbyyear or monthby month decision. Doing a breakeven analysis can help you determine when youd come out ahead by delaying benefits. All three are only true to a point and as youre planning your social security filing age, you should understand the. Pension offset gpo calculator can tell you how your benefits as a spouse, widow or. My wife will still be working making enough money for both us to live comfortable. A good social security calculator can help you get more benefits over your retirement years by providing you with customized claiming strategies that you might not have been aware of otherwise. What is the breakeven age for social security if i retire at 62. Those social security breakeven calculations can be. Thats because the chances of one or the other, if not both of you, outliving the. Whats the best age to claim social security 62, 66, or 70.
Seven in 10 singles and half of all married couples receive at least 50% of their retirement income from social. This online social security calculator will help you choose when to take social security benefits. Why it might be better to take social security at age 66. After downloading the program, install it by executing the downloaded file. Claiming social security early at 62 will result in a reduced monthly benefit compared to how much youre eligible to receive at full retirement age 66 or 67 for most people. Provides rough estimates of your retirement benefit based on your current earnings. Aug 28, 2017 it is pretty well known that there is a benefit penalty for taking social security ss earlier than your full retirement age between 65 and 67. In the example above you see the highest 35 years in column g. Fra of 66, but delay taking social security until 63 or 64, how much % more per year will i get assuming i stop work at 62. When to start taking social security 62 66 70 duration. Age 62 is the earliest age at which you can begin drawing on your social security retirement benefits, and like many people, you may want to take your benefits as soon as you can. It would allow a bigger check at 66 i have to believe this was already discussed but what is the thought here. If the age you enter is less than 62, we estimate your benefit at age 62.
The social security administration reduces retirement benefits according to the number of months it is paid out prior to full retirement age, which is now 66 for those born in the years 1943 to 1954. Aug 30, 2019 given these assumptions, the net present value of our hypothetical retirees total social security benefits would be 0. The current version of the detailed calculator is 2020. Sep 01, 2017 does it make more sense for me to begin collecting at 62 instead of waiting until i am 66. Determining when to claim social security based on this strategy alone is not recommended unless you have substantial assets. So benefit estimates made by the quick calculator are rough. You may be eligible to collect social security as early as 62, but waiting until age 70. Taking social security at 63 or 66 page 2 aarp online. Theres no correct claiming age for everybody, but if you can afford to wait, starting social security later than age 62 can pay off over a long retirement. The one i side with is to collect at 62 for the reason that i will not be working. If you do not have 35 years of earnings, a zero will be used in the calculation, which will lower the average. If your spouse has earned very few social security credits, then the argument for delaying until age 66 is more compelling.
Between age 65 and age 70, the break even point is 82. Retirees can elect to receive social security benefits starting at age 62 or as late as age 70, though full retirement age varies depending on. When i run these analyses using 45% discount rates and assuming a 2030% drop in social security payments in 2034 for people in the 6064 age range, it generally puts breakeven in the early to mid 80s for 62 vs. Break even points for social security filing ages figuide. Social security website provides calculators for various purposes. You can also apply for retirement, disability, survivors or medicare benefits at 23, but the condition is the money you will receive will have lower value. You can expect the following when applying for social security spousal benefits.
Collect social security at 62 and spousal at full retirement age. Clearing up common questions about social security. Is there a difference between filing at age 62 or 63. Why must my age be 22 or greater to use the quick calculator. Its not that simple with social security benefits, however. The decision of when to take social security is highly dependent on your circumstances. Should i use ira funds or social security at age 62. Download the schwab app from itunesget the appclose. Bond yields have crept higher over the past year, but wall street still doesnt offer a product that yields 6%, is backed by the u. Use our wep online calculator or download our detailed calculator to see how your. Whats the best age to claim social security 62, 66, or. For simplicitys sake, writers and financial advisors often compare claiming social security at 62 to claiming at 70, in order to show the difference between the two extreme strategies. To make the most of your spousal social security benefit, it can be helpful to be aware of the amount you might be.
How to maximize social security with spousal benefits. The post break even points for social security filing ages appeared first on getting your financial ducks in a row. It is pretty well known that there is a benefit penalty for taking social security ss earlier than your full retirement age between 65 and 67. The idle age for claiming any of social security benefit is 66. A better strategy is to look at all your sources of. The 1 chart you need to decide when to take social. As such, deciding when to take social security is an important decision. Sep 11, 2019 most people want to collect their social security benefits as soon as they are eligible, which is at 62.
When to start taking social security 62 66 70 youtube. But your monthly benefit is also significantly reduced. Collecting social security at 62 my thoughts with pawpaw. The calculator shown below allows you to estimate your social security benefit if.
Taking social security at 63 or 66 aarp online community. Jul 17, 2017 if you were to take your social security at age 66 or 67 you will receive the maximum benefit, but at age 62, this figure is reduced to 34 of the total income. In tables below we show what the tax impact would be for using social security at age 62, fra, and age 70. From 62 years to 63 years, 11 months, further reduce the normal benefit by 512 of 1% each month i take a really early retirement in addition to the previous reductions. You can elect to take benefits as early as age 62 or earlier if you are a survivor of another social security claimant or on disability, or wait until as late as age 70. Retirees can collect social security retirement insurance benefits rib as early as age 62. Even if you are married, the place to start when trying to figure out when to claim social security is with a solid understanding of the less complicated analysis for unmarried retirees. Part two my thoughts on drawing social security at 62 plus spreadsheet directions duration. Social security calculator benefits estimator bankrate. If you claim benefits early and live past your estimated breakeven age, you will have forfeited additional benefits that could have been paid to you had you waited.
Social security benefits provide around 33% of all income for elderly americans. For every month that an individual postpones claiming social security benefits beyond full retirement age up to age 70, they earn an additional 0. In the comparison between a person claiming at 62 and at 66, he assumes the early claimant invests the money for four years, producing a tidy sum by. Why 80 percent of women take social security too early cbs news. Breakeven analysis offers insight into whether it pays off to take social security benefits early or wait until full retirement age to claim them. The extra credits for waiting until 70 actually decrease the breakeven time so that you would begin to pull ahead at age 78. For every year you delay past your fra up to age 70, you get an 8% increase in your benefit. Heres a game plan to help you figure out if it makes sense to take your social security early, on time, or late. Social security breakeven calculating breakeven age. While they are all useful, there currently isnt a way to help determine the ideal financially speaking age at which a person between the ages of 62 70 should apply for their social security retirement benefits. You could owe federal and state taxes on your social security benefits. I tested 2 free social security retirement calculators, and heres what i found. Full retirement age fra is between 66 and 67, depending on your birth date. Consider this move carefully, though, because you might be making a big mistake.
Remember, the earliest a person can start receiving social security retirement benefits will remain age 62. I have had two different financial advisors say exactly the opposite about when to collect. All three are only true to a point and as youre planning your social security filing age, you should understand the real truth behind these three items. If your retirement benefits start after your full retirement age 66 years the. Your pia is the amount youd receive if you were to qualify for disability benefits. While your actual fra may fall in the middle of a calendar year, for this calculator, use age 66 if you were born between 1942 and 1957. If you need a copy of your annual statement, you can request one from the social security administration ssa. I tested 2 free social security retirement calculators. Anyone here planning to collect social security at age 62. You would also need to begin receiving benefits at your full retirement age of 66 or 67 depending on your birth date. Find out if it is better to start social security at 62 or 66 or at some other time. Best age for social security retirement benefits bankrate. If you plan on taking benefits at 62, rather than 66, and you plan to continue working, then you should factor into your decision that the social security administration. Oct 10, 2018 determining when to claim social security based on this strategy alone is not recommended unless you have substantial assets.
You can collect social security as early as age 62, but your benefits will be permanently reduced. The social security administration now has a calculator that lets you estimate your retirement benefit by accessing. How do i calculate my social security breakeven age. Claiming social security early at 62 will result in a reduced monthly benefit compared to how much youre eligible to receive at full retirement age 66. Can you afford to retire early and claim benefits at age 62, should you wait until your full retirement age, or can you wait until age 70 in. Oct 09, 2019 this article takes a long hard look at these three facts about social security filing age and shows the real math behind them. Social security is a yearbyyear or monthby month decision for simplicitys sake, writers and financial advisors often compare claiming social security at 62 to claiming at 70, in order to show the difference between the two extreme strategies. While youre technically eligible to begin taking social security benefits at age 62, you wont receive your pia until your full retirement age fra, which will fall somewhere between 66 and. What is the breakeven age for social security if i retire. If they decide to take benefits at 62, they would lose 25 percent of the monthly value of their.
Is it better to take social security at 62 and use retirement money, or wait until 66 and use all retirement money until then. Social security is a guaranteed, inflation protected lifetime income source. Choosing between a retroactive lump sum and a bigger. If your full retirement benefit had not been reduced by wep, your age 62. Sep 23, 2014 why 80 percent of women take social security too early. As mentioned, 62 is the most popular age at which to start taking social security benefits, and its not hard to imagine why. When to take social security retirement benefits spreadsheet. Jul 16, 2016 does it make a difference dollar wise if i collect social security at 62 or 63.
Oldage benefit for a fully insured worker beginning at about age 62 or later. Can you afford to retire early and claim benefits at age 62, should you wait until your full retirement age, or can you wait until age 70 in order to receive the largest. Precisely when you become eligible to receive your full, unreduced social security retirement benefit depends on the year of your birth. If you were born between 1943 and 1954 your full retirement age is 66. Jul 15, 2019 the social security benefits calculation uses your highest 35 years of earnings to calculate your average monthly earnings. Hi don, yes, social security benefits are reduced by a percentage for each month that you start prior to full retirement age fra. The annual payment you receive from social security is based on your income, birth year, and the age at which you elect to begin receiving benefits. Benefit estimates depend on your date of birth and on your earnings history. This social security calculator helps choose when to take social security benefits. In addition, the calculator is not set up to estimate dependent or survivor benefits. From 64 years to 66 years, 11 months, reduce the normal benefit by 59 of 1% each month i take an early retirement. Feb 09, 2012 i am at odds at what to do when i should start collecting my ss.