Financial Planning Fridays #33: When to Collect Social Security

Social Security and when to begin collecting can be very confusing, but it will be one of the most impactful decisions you will make regarding your retirement income. For that reason, we wanted to highlight seven key things you should know before you make your decision.

1. The full retirement age for social security is now 67- however you can collect as early as age 62 and as late at age 70. The amount you can collect in social security increases by about eight percent per year for every year that you wait.

2.Your social security benefits will likely be reduced if you decide to collect before age 67 and are still working.

3 Your spouse will receive the higher of your benefit or their benefit after you pass away.

4. Your spouse is also able to collect the higher of their own benefit or half of your social security benefit without any impact to your social security income.

5. You must begin medicare at age 65, even if you are not collecting social security. If you do not enroll, this may end up not only delaying your benefits, but also costing you more.

6. The break even age for collecting your SSI benefit at 67 rather than early at 62 is about 75. The break even age for collecting at age 70 is around 79. Consequently, if you plan on living past 79, there is a good chance you will collect more by waiting until age 70. These break even points can vary from person to person depending on a few factors. We are happy to run this calculation for you.

7. A recent study by the Atlanta Federal Reserve, and featured in the Wall Street Journal, showed that 90% of workers aged 45-62 would benefit by waiting until age 70 before collecting social security. In addition, the survey noted that waiting would boost their discretionary spending by about 10% per year in retirement. However less than 10% of retirees are likely to wait that long to collect.

There are a wide variety of financial planning and tax issues that go into your decision on when
and how to collect social security. We are happy to model out different scenarios within your
financial plan to see which option makes the most sense for you and your family.

Be on the lookout for our next Financial Planning Fridays episode. Subscribe to our Youtube Channel so you never miss an episode. Or contact us directly; schedule your 15-minute call with us today.