Started in 1935, Social Security is designed that you pay into it during your working years and received a monthly check in retirement based on the amount you put in.
Benefits are calculated on a 35 year career and to receive 100% of benefits you must wait until age 66 or 67 depending on when you were born.
There are eight years during which you can start taking Social Security Benefits, ages 62-70. You need to consider other aspects of your retirement plan such as birthdate, income, investments, and your financial needs before you make a decision. If you wait till age 70, you receive ~75% more than if you start at age 62.
Up to 85% of Social Security income is taxable. Therefore factors such as selling a house and living on proceeds until age 70 might out weight taking benefits earlier. Or maybe you are bullish on your investments and want to let them continue to grow, so you take Social Security at 62 to leave your investments untouched.
Social Security also can serve as a form of insurance for the rest of your family. A “non-working” spouse can collect 50% of what his spouse receives when he or she filed for benefits.
Filing a “restricted application” on ex-spouse earnings can augment your own income. If you are 62 years old and responsible for a child under age 18, that child can receive up to half your monthly benefits.
A surviving spouse who is disabled and as young as 50 is eligible for benefits, depending on some provisions. And a widow or widower can receive reduced benefits as early as age 60.
This article is for informational purposes only and is not a complete summary of information needed to recommend any investment. Consult the appropriate professional to determine how this information applies to your unique situation.
About the Author: Charles Marsala is a Financial Advisor with Benchmark Investment Group with Securities offered through LPL Financial, a member FINRA/SIPC. He can be contacted at Charles.Marsala@lpl.com