Social Security For Dummies. Jonathan Peterson
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Название: Social Security For Dummies
Автор: Jonathan Peterson
Издательство: John Wiley & Sons Limited
Жанр: Личные финансы
isbn: 9781119689959
isbn:
If you use the SSA’s Retirement Estimator, you’ll see roughly how much Social Security you could get, especially if your earnings don’t skyrocket or crash between now and the time you retire. If you haven’t yet done so, you can use the Retirement Estimator as a starting point to think about how much money you can count on in retirement. (I talk more about planning for retirement in Chapter 14.)
www.ssa.gov/site/signin/en/. This online statement offers estimates of your future benefits for retirement, for your survivors, and for disability. For an in-depth discussion of “my Social Security” accounts, turn to Chapter 7.
As I mention earlier, you stand to get much more money each month if you can delay collecting Social Security past your full retirement age. For example, if you were born between 1943 and 1954, your Social Security payment at 62 is 25 percent lower than if you wait until 66 (your full retirement age). If you hold off to age 70 — four years past your full retirement age — the benefit balloons by 32 percent.
These differences can add up to real money over the years — or decades. Consider the following example:
Elisa was born in 1957 and wants to know how she would be affected by choosing different dates to retire. She goes to SSA’s Quick Calculator (www.ssa.gov/OACT/quickcalc/index.html) and plugs in the $160,000 she earned last year. If Elisa waits until her full retirement age of 66 years and 6 months, she’ll get about $2,881 per month. If she waits until 70 to collect benefits, she’ll get about $3,756 per month. And if she wants to start as soon as possible, at 62, she’ll get a more modest $2,044 per month.
Elisa knows that longevity runs in her family, so she wants to find out how much she’ll collect from Social Security if she lives to 90. To get the answer, she calculates the number of months she would receive benefits in three different cases: starting at 62 (336 months), starting at 66 and six months — her full retirement age — (280 months), and starting at 70 (240 months). Then she multiplies the number of months by the estimated benefit provided by the online tool.
If Elisa starts the benefit at 62 and lives to 90, she could end up with more than $686,784 over her lifetime, not even counting increases for inflation (336 months between 62 and 90, multiplied by the estimated benefit of $2,044 per month for benefits starting at 62). If she starts at 66 and 6 months, her lifetime collection would exceed $806,680. And if she starts the benefit at 70, she ends up with more than $901,440. The difference between starting benefits at 62 and at 70 comes to $214,656 for Elisa.
Figure 3-1 shows that your decision on when to begin retirement benefits makes a real difference in your monthly income. The numbers here are based on a retirement age of 66 and a monthly benefit of $1,000. They may differ based on your year of birth and other factors.
Source: Social Security Administration
FIGURE 3-1: The amount of your monthly benefit depends on the age you start receiving it.
TABLE 3-2 Increase for Delayed Retirement
| Year of Birth* | Yearly Rate of Increase | Monthly Rate of Increase |
|---|---|---|
| 1933–1934 | 5.5 percent |
 |
| 1935–1936 | 6.0 percent | ½ of 1 percent |
| 1937–1938 | 6.5 percent |
 |
| 1939–1940 | 7.0 percent |
 |
| 1941–1942 | 7.5 percent | 5⁄8 of 1 percent |
| 1943 or later | 8.0 percent | 2⁄3 of 1 percent |
* If you were born on January 1, refer to the previous year.
USING YOUR NEST EGG TO DELAY CLAIMING
If you’re fortunate enough to have a nest egg and you want to retire, you can consider withdrawing more savings up front as a way to hold off starting your Social Security benefit. But does the strategy make sense? It well may, and there are some important things to keep in mind.
Social Security benefits go up about 7 percent for each year they are not claimed between age 62 and your full retirement age. Wait longer and the reward grows even more: Benefits increase 8 percent annually for each year they are not claimed between full retirement age and 70.
Are your financial resources adequate to support your lifestyle without Social Security, so you can delay claiming and lock in the income gains I just described? The issue can get complicated, and those interested may want to talk it over with a financial advisor. Among the considerations are the following:
The tax bite: A portion of your Social Security benefit may be subject СКАЧАТЬ