When a person elects to begin collecting Social Security payments is a very important decision. If you retire at the age of 60 years old, 60 years old may not be the best time to collect Social Security payments. The age at which you begin collecting will impact your benefits for the rest of your life. Additionally, your choice to begin collecting payments too early can negatively impact your spouse. Here at Red Law of Ogden, Utah, our experienced estate planning attorneys can help you develop a plan to help you meet your financial needs.
Before you choose when you will begin collecting Social Security payments, there are a number of things you should consider:
All of these factors need to be weighed and considered prior to electing to take out Social Security payments.
Your Social Security payment will depend on two things: (1) how much you earned over your working career, and (2) the age at which you apply for benefits. Your payment will be based on averaging your earnings over your highest 35 years of income. You can begin receiving your full social security benefits at “full retirement age.” Full retirement age is 65 for those born between 1937 and 1942, 66 for those born between 1943 and 1959, and 67 for those born in 1960 or later. If your full retirement age is 66 years old and you elect to begin receiving payments at 62 years old, you will receive only approximately 70% of your monthly benefits.
You can increase your monthly payments by delaying the date you begin collecting Social Security benefits. Social Security benefits are increased by a certain percentage if you delay your retirement beyond “full retirement age.” For example, if your full retirement age is 66 years old and you elect to delay payments until you are 69 years old, you will see an increase in your full retirement benefit by about 24%. This isn’t always the best option, however. One of the biggest factors one needs to consider when delaying Social Security benefits is their life expectancy.
Here’s a Social Security payment calculator that will help you estimate your benefits.
Even if you have never worked under Social Security, you may still be able to receive Social Security benefits. You can receive payments if (1) you are at least 62 years of age and (2) your spouse is receiving Social Security or disability benefits. Even if you are divorced, you may still qualify to receive Social Security benefits based on your former spouse’s record. How much you receive will depend on how much your spouse earned over their working career and whether you qualify for any benefits based on your own work history.
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