Provided by Joseph V. Curatolo
Many people decide to begin receiving early Social Security retirement benefits. In fact, according to the Social Security Administration, about 72 percent of retired workers receive benefits prior to their full retirement age. But waiting longer could significantly increase your monthly retirement income, so weigh your options carefully before making a decision.
Timing counts
Your monthly Social Security retirement benefit is based on your lifetime earnings. Your base benefit — the amount you’ll receive at full retirement age — is calculated using a formula that takes into account your 35 highest earnings years.
If you file for retirement benefits before reaching full retirement age (66 to 67, depending on your birth year), your benefit will be permanently reduced. For example, at age 62, each benefit check will be 25 to 30 percent less than it would have been had you waited and claimed your benefit at full retirement age.
Alternatively, if you postpone filing for benefits past your full retirement age, you’ll earn delayed retirement credits for each month you wait, up until age 70. Delayed retirement credits will increase the amount you receive by about 8 percent per year if you were born in 1943 or later.
Early or late?
Should you begin receiving Social Security benefits early, or wait until full retirement age or even longer? If you absolutely need the money right away, your decision is clear-cut; otherwise, there’s no ”right” answer. But take time to make an informed, well-reasoned decision. Consider factors such as how much retirement income you’ll need, your life expectancy, how your spouse or survivors might be affected, whether you plan to work after you start receiving benefits, and how your income taxes might be affected.
Joseph V. Curatolo is president of Georgetown Capital Group, 5350 Main St., Williamsville (phone: 633-9800, toll-free 1 (800) 648-8091, fax 633-9789, www.georgetowncapital.com).
Insurance services offered by Georgetown Capital Group, which is independent of Royal Alliance Associates, Inc., with separate ownership, and is not registered as a broker-dealer or investment advisor.
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