Why, when I was 62, I wouldn’t dream of applying for welfare



I recently celebrated my 30th birthday, so although I feel old-fashioned, I am still a long way from applying for welfare. I have about 40 years left under my pension plan because I have chosen to draw my maximum Social Security benefit. For me it was a matter of course, but the decision is not that easy for everyone.

How the entry age of social security affects your benefits

Anyone who has worked for at least 10 years is entitled to social security benefits when they turn 62. However, if you want to get the full benefit that you are entitled to based on your work history, you will need to wait until you reach Full Retirement Age (FRA) to sign above. That’s 66 for those born between 1943 and 1954. After that, it increases by two months a year each year until it reaches 67 for those born in 1960 or later.

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The Social Security Agency will slightly reduce your checks for each month that you apply for benefits under your FRA. If you sign up immediately at 62, you will only receive 70% of your full benefit per check if your FRA is 67, or 75% if your FRA is 66.

You can also defer benefits beyond your FRA if you want larger social security checks. The Social Security Board increases your benefit every month if you defer the benefit until you are 70 years old. At this age, you will receive 124% of your full benefit per check if your FRA is 67, or 132% if your FRA is 66.

Why I wait until 70

I decided to postpone social security benefits until I was 70 because I believe that this will give me more money overall than starting benefits earlier. It all depends on my life expectancy. I’m a pretty healthy person so I think there’s a good chance I’ll be in my 80s or older.

Assuming I am entitled to the average Social Security benefit – $ 1,508 per month – on my FRA of 67 and living to 85, that’s how much I would get per month and total if I signed up at 62, 67, and 70.

Registration at 62

Registration at 67

Registration at 70

Monthly checks

$ 1,056

$ 1,508

$ 1,870

Lifelong benefit

$ 291,456

$ 325,728

$ 336,600

Source: author’s calculations.

On this basis, as long as I live until I am 85, I can get significantly more out of social security than with an early start.

The other factor to consider, of course, is whether I can afford to put off social security for so long. And I’m pretty confident that I can. I’ve been saving for retirement for a decade and strive to put at least 15% of my income aside each year. So I should have enough savings to support myself in the early years of my retirement until I’m ready to apply for social security contributions.

What could change my mind

Right now my plan is to postpone benefits until 70, but as I said at the beginning of this article, I am far from claiming age and a lot could happen by then. Here are a few things that could cause me to change my social security plans:

  • Health problems: My current plan is based on the idea that I will stay healthy, but if a life-threatening health problem arises later, it may be more beneficial for me to claim Social Security once I’m eligible.
  • Unexpected job loss: I may not be able to afford to postpone social security if I’m forced to retire earlier than planned. If I don’t have as much savings as I thought, I may need to make social security claims early to make ends meet.
  • Changes in social security: Social security is facing a lack of funding in the not too distant future. This could result in benefit cuts unless the government makes some changes to the program. If that happens, it could change my social security plans.

What’s best for you?

When to register for social security is an individual decision. There are a number of factors that you need to consider including your health, your finances, and your long-term goals. Weigh all of these factors when deciding which starting age makes the most sense for you. A … create my social security account to get a personal estimate of how much Social Security you could get at different starting ages. Follow a similar process to me above when trying to gauge what overall starting age will get you the most.

Remember, you are making a plan, but it doesn’t have to be forever. You can make changes later if your life takes an unexpected turn. Remember to change your retirement plan too to make sure you have enough money to cover all of your expenses.


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