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The Best Age to Collect Social Security

The best age to begin collecting social security payments is a personal choice, to be sure. However, several factors should be considered before making this decision.


Let's begin by determine your Full Retirement Age, or FRA. This age is determined by the year you were born. At this age, you will collect 100% of your benefits. If you retire before this age, your benefit will be less. Should you delay retirement, your monthly benefit will increase.


Social Security was designed as a safety net. You should have other sources of income to live comfortably in your golden years.


Knowing this, why would anyone take benefits prior to your FRA? The first reason is declining health. Perhaps you are no longer able to complete the duties of your job. The physical pain or mental anguish is a burden that can not be ignored any longer. Maybe its not a diagnosed health issue, but a personal choice based on your dislike of the job or the people you work with. The job is no longer fun and your career is not going to grow in any way. Maybe it is time to walk away. A third reason to take Social Security early is a "forced retirement." Due to a reduction in your company's workforce, you are terminated. Because of your age and stage in life, you may not be able to find suitable employment, so you opt in for your Social Security benefits.


The current average Social Security benefit is $16,416 per year or $1,368 per month. This is the average. Your benefit will be determined by your salary and years in the Social Security system. Go to the Social Security web site to find your anticipated payout. https://www.ssa.gov


Assuming the FRA for a person is 66 years old. This average person will receive the yearly benefit of $16,416. If this person takes early retirement, the benefit will be reduced by 8% per year. Below is the chart showing the annual benefit at early retirement age.

Age 65 - $15,103

Age 64 - $13,895

Age 63 - $12,783

Age 62 - $11,760

In contrast, if retirement benefits are postponed, the annual benefit will rise by 8% per year. Continuing on with this example, the benefit rises by the amounts below

Age 67 - $17,729

Age 68 - $19,147

Age 69 - $20,679

Age 70 - $22,333

The timing of retirement is personal and many factors influence this decision. By knowing your personal benefit will allow to make a more informed decision. You may decide to work longer to increase your savings or you may decide it is time to travel and let someone else handle the daily grind or your work. Do your homework and good luck!



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Tim Ryan Money Matters of Houson | 2020