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When should I start receiving Social Security? Many baby boomers are asking themselves this question. The program has been around for 75 years and was originally set up to aid senior citizens escape poverty. For many it’s their primary source of income. For others it helps to supplement savings and pensions. What is the best age to start receiving Social Security? There’s no “best age.” It is best to make an informed decision about when to apply. It’s a tough call to know when the time is right.
At the age of 62, if you had worked for over 35 years in jobs that you had paid maximum Social Security, the most that you could receive is about $2,000 per month. If you receive social security at 62 and continue to work, your social security benefits will be reduced by $1 for every $2 you earn above $15,720. At full retirement age, in most cases 66, there will be no reduction if you continue to work.
Many people ask themselves, should I receive benefits at 62, 66, or 70? For example, let’s say your full retirement age is 66 and your calculated benefit is $2,500. If you should retire at 62 and elect to get benefits, there would be a monthly benefit reduction by 25% to $1875. If you elect to wait until the age of 70, the monthly benefit will increase by 32% to $3,300. If a person works past the age of 70, the Social Security Administration will review benefits every year to see if one should receive more credit. Many people who are in great health and don’t need social security wait until the age of 70 to collect.
One important item to know about Medicare is that it’s best to apply at age 65, even if you haven’t applied for social security. There is a 10% penalty for life if you don’t apply at 65. The exception is if you are covered by an employers’ group plan.
There are many strategies depending on individual circumstance. An informed decision can be a very valuable tool to help determine when the time is right to start taking Social Security.
*Securities offered through 1st Global Capital Corp. Member FINRA, SIPC. Investment advisory services offered through 1st Global Advisors, Inc. We currently have individuals licensed to offer securities in the states of AL, AZ, CA, CO, CT, FL, GA, HI, ID, IL, IN, KY, MI, MS, MO, NV, NJ, NC, OH, RI, TN, TX, WA, WV and WI. This is not an offer to sell securities in any other state or jurisdiction.