When it comes to Social Security benefits, there is no one-size-fits-all approach. You can opt to collect your monthly checks early (at age 62), at full retirement age (between age 66 and 67) or at age 70, when you will receive your maximum benefit. As you can see, there are several options based on your financial needs. However, you may be concerned that Social Security benefits won’t even be an option by the time you retire. We have heard the myths that money is running out and the program will soon be obsolete. Disregard this. Social Security will be there for you, so don’t ignore it. It will likely make up as much as 50% of your retirement income. Over the course of your lifetime, it could amount to more than $500,000, especially since life expectancies are rising and modern medical technology is allowing many people to live well into their 80s, 90s and beyond. Therefore, it makes sense to optimize your benefits.
Social Security has many benefits as a retirement asset. It:
- Will continue to pay throughout your lifetime.
- Is adjusted for inflation on an annual basis.
- Offers tax advantages.
- Is backed by the government.
When deciding whether to claim early or later, consider your savings and other retirement accounts. You do not want to outlive your money.
Is Earlier Better?
Those who have been unexpectedly laid off from a job or are struggling financially may find it better to take Social Security at age 62. By doing so, though, you can lose out on 30% of your benefits. Each year you delay your benefits will increase your benefit amount by about 8%. Therefore, it is better to wait a few years, if possible, if you want to maximize your benefit. However, longevity and health also play a role. If you can no longer work due to health issues and do not plan to live into your 70s and beyond, then taking advantage of Social Security as early as possible may be the better choice. This way, you will receive a higher lifetime benefit than if you had waited.
Options for Couples
Those who are married or have been married at some point have more options when it comes to claiming Social Security benefits. That’s because the couple can claim each other’s benefits, if it makes more financial sense. For example, if her husband was the higher earner, a woman may wish to claim her husband’s benefits rather than her own. They would receive only 50% of their spouse’s benefit, but if the woman did not work much, it may be much higher than her own benefit.
Contact Us Today
When it comes to money and benefits, obviously more is better. Whether you are single or married, there are ways to maximize your Social Security benefits. Boston Cash Flow Financial can help. Social Security benefits are guaranteed for life and we can help you take advantage of them. Contact Boston Cash Flow Financial today to learn more.
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