For some of you Social Security isn’t even on your radar, for others it’s around the corner. Some may believe there may be no funds left by the time they reach the age to collect, other are counting on it to help them retire, if not comfortably, at least reasonably.
Regardless of your age, there are a few things you should be doing right now with your Social Security account to insure the future.
- All of us should set up a Social Security account. It is easy to do. Register on the Social Security web site under “My Social Security”. Once your account is established, you should check it yearly to ensure your payments have been properly reported. Mistakes happen. Better to find out now rather than later! You can also view the estimates on your future payments.
- It’s also good to know what your full retirement age is currently. There have been some adjustments to the age requirements through the years and, who knows, there may be more to come in the future. This table shows how things stand now:
BIRTH YEAR |
FULL RETIREMENT AGE |
1937 and before |
65 |
1938 |
65 and 2 months |
1939 |
65 and 4 months |
1940 |
65 and 6 months |
1941 |
65 and 8 months |
1942 |
65 and 10 months |
1943 – 1954 |
66 |
1955 |
66 and 2 months |
1956 |
66 and 4 months |
1957 |
66 and 6 months |
1958 |
66 and 8 months |
1959 |
66 and 10 months |
1960 and later |
67 |
- At what age do you think you may want to retire? Now that you know when your full retirement age is, you can actually retire earlier (at 62) or later (70). Depending upon the age you choose, your payment will be smaller or larger. Each year you delay the payment increases by about 8%. There are benefits to both. If you are in poor health, you may want to start your payments earlier. If longevity runs in your family, you may want to wait so your money lasts longer. If you live to the average age, you will most likely collect the same total amount whether you retire early or late.
START COLLECTING AT: |
FULL RETIREMENT AGE OF 66 |
FULL RETIREMENT AGE OF 67 |
62 |
75% |
70% |
63 |
80% |
75% |
64 |
86.7% |
80% |
65 |
93.3% |
86.7% |
66 |
100% |
93.3% |
67 |
108% |
100% |
68 |
116% |
108% |
69 |
124% |
116% |
70 |
132% |
124% |
- If you are married, you should coordinate with your spouse on your retirement ages. When you both start collecting, you get 2 checks. But when one spouse passes, the survivor will only collect one check, the larger of the 2 checks. To optimize your payments, the higher earner may want to delay a bit longer.
- Other ways to increase your benefits; make sure you work at least 35 years. Your Social Security payments will be based on the 35 years with the highest earnings. If you don’t have 35 years in, whatever amount you are missing will be counted as $0 earnings for those missing years. If you are making more income in the later years than the beginning years, you may want to work longer to erase the sparser years.
It will pay in the long run to keep up to date on these few little “secrets”. It could mean the difference of thousands of dollars. At Chestnut Investment Advisory, I can help you plan to maximize your future. Call for an appointment - the sooner, the better.