Seniors are frequently advised to use caution when applying for Social Security. This is because your filing age can affect how much monthly income you receive from the program for the rest of your life. If you’re in your early or mid-60s, you might want to put off filing for Social Security to increase your monthly income. However, in other cases, delaying filing does not pay. And if any of these instances apply to you, you should file a claim as soon as possible. You’re Considering End-of-Life Care Your Social Security benefits stop paying when you die, so you’ll be out of luck if you die before collecting payments. Instead, you should figure out how to maximize your Social Security income. Assume you intend to wait until age 70 to get the bigger monthly payout. If you die before your 70th birthday, you will not be eligible for benefits. It’s tough to forecast how long you’ll live, especially if you’re in good condition. Your Life Expectancy is Lower The government incentivizes you to delay collecting your Social Security benefits by increasing your monthly payment the longer you wait. Your monthly payment will be approximately 75% of your full-age benefit if you begin collecting at age 62 and are 66 at the time of complete retirement. So, if you planned to earn $1,000 per month at age 66, you would only receive roughly $750 at age 62. Although a greater monthly benefit may sound appealing, keep in mind that you would have to wait four years to receive the extra $250 per month. You would earn $36,000 over four years at a decreased monthly rate of $750. If you begin collecting $1,000 at age 66, that extra $250 per month will not allow you to break even for 12 years. If your health worsens and you don’t expect to live past the age of 78, filing your claim as soon as possible can earn you more benefits. You Must Pay Off Your Debts Before you retire, you must pay off some debts. Applying for Social Security early can help you pay off your high-interest debt. Depending on your interest rate, the 8% annual increase in benefits you earn each year you wait over full retirement age may not be worth the additional monthly income. Using your early benefits to lower or eliminate your debt sooner may allow you to keep more of your benefits in the future. You Work Part-time Suppose you claim Social Security before reaching full retirement age but are still working part-time. In that case, your benefits may be cut if your employment income exceeds the yearly maximum. Your benefits will be decreased by $1 for every $2 in income beyond $19,560 in 2022 if you are under the full retirement age. Benefits will be reduced by $1 for every $3 in earnings over $51,960 in 2022 once the full retirement age has been reached. Suppose you are 62 years old and working part-time to supplement your income. In that case, you may want to start collecting Social Security payments. Nobody Else is Reliant on Your Benefits In the event of your death, the Social Security Administration may pay money to a surviving spouse, minor or disabled child based on the number of your benefits. A surviving spouse, for example, can receive between 71.5% and 100% of your benefit amount, depending on the surviving spouse’s age. Your disabled child might receive 75% of your monthly payments even after you’re gone. Suppose no one else qualifies for benefits based on your record. In that case, you may wish to retire early because no one is relying on that money. You’ve Already Had 35 of Your Highest-earning Years Income from the previous 35 years determines your monthly Social Security payout. Working a few more years and delaying benefits can help you maximize your retirement income if you’re in your prime earning years. However, if you are not going to improve your average earnings, such as if you are only working part-time or have had to retire early, you will not miss out on the opportunity to increase your benefits with higher earning years. You will receive a lower reward for not waiting until full retirement age.
Contact Information:
Email: [email protected]
Phone: 8777993433
Menu
Menu
