When I read the literature from SSA, it sounds to me like once you start collecting retirement benefits, the based amount you collect is "frozen" at that level, and subject only to COLA increases.
I understood that if you start collecting at age 62, your benefit will stay at the $2,000 subject to COLA changes. The person my wife spoke to indicated that if you start at age 62, in addition to the COLA increases, you could expect other increases based on getting to the age milestones.
Does anybody here know what actually happens? Thanks.
Yes, start collecting at 62 and that is your rate from there on.
I does not increase outside of COLA (which isn’t happening because there s no Inflation - LOL) unless you are still working and paying into SS.
You take it early, that’s your Payment. The longer you wait the more you get. Since I have been dealing with Leukemia for nearly ten years now, I started taking it at Age 62.
Taking benefits earlier than your full retirement age (as determined by SS) results in a percentage of the full amount. That remains your fixed monthly amount from then on, only allowing for COLA increases in the years that such are granted.
The earliest you can “normally” start drawing social security (SS) is 62. The amount that you can draw depends on how much you have put into the system during your work years. That amount will be different for most everyone because you’ve earned different amounts in your work life. Your full retirement age depends on when you were born. Some people can claim their amount at 65, some at 66 and some at 66yrs, so many months. If you choose to delay collecting until 70, the amount increases at approx 8% per year. Hope this helps.
If your retire at 62 you set that amount for the duration. It is currently at 75% of what you’d get at 66. I would note that it will take you 12 years to come out ahead waiting on 66. You can fare a lot better if you wait until 70, but then you have to be sure you’ll last that long.
For me it was a no brainer. I took the 62 because I’d never live that extra 12 years.
The only thing you have to consider is how much earned income you might make until 66 if you take the 62 option. The bastards take back $1 for every $2 you go over their magical amount. The last year before 66 I think that goes to $1 for every $3 over their limit. There after, the income cap is like everyone else’s.
But I repeat, if you take the early options that amount is set for the duration, except for COLA raises when they happen.
” The person my wife spoke to indicated that if you start at age 62, in addition to the COLA increases, you could expect other increases based on getting to the age milestones.”
The only thing that happens for certin is your medicare subtraction ( deducted from your SS benefit) goes up and the tax consequences on income change. Max benefit does not.
As an example in 2016 no COLA increase but there is an increase in how much they take out for Medicare (65 and older) so your net SS take home is less.
Gotta pay for those illegals and refugees somehow so Feds save it on the aged.
You get your full benefit if you start collecting at full retirement age, which varies depending on your year of birth but for some boomers is age 66.5
If you start collecting sooner the benefit is permanently reduced and if you wait beyond full retirement age, there is a slight increase every year up to age 70
Otherwise known as "Republican cuts to Social Security".
You get your full benefit if you start collecting at full retirement age, which varies depending on your year of birth but for some boomers is age 66.5
If you start collecting sooner the benefit is permanently reduced and if you wait beyond full retirement age, there is a slight increase every year up to age 70
What if you don’t start taking it even when you’re 70?
I started collecting at 62 and the only increase I got is because I had part-time work for a couple of years.
If I hadn’t worked it would have stayed the same.
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I’m so sorry to have to ask, what planet have you been living on?
There are a lot of things to consider when deciding when to collect.
Obviously, if you are broke and have no job, the only thing to do at age 62 is to start collecting. But this limits the amount of money that you can make if you do manage to find employment.
On the other hand, if you are 62, retired, and have more income than you need, you should put off collecting. If you are well-off, 85% of Social Security is taxable, and collecting SS may set off income tax on other income that you would otherwise not have to pay.
Take a retired couple with $80K in stock dividends as their sole income. They pay no Federal tax. If they were both eligible for SS, and could collect $50K combined, they would have to pay income tax on $42.5K. They would also now owe tax on about $20K of their stock dividends.
Because of the cost of health insurance, and the fact that my girlfriend is 10 years younger, I am working until 65. (I am 62 1/2 now).
My SS benefits will go up $500 per month by waiting until 65. They may even increase a little as I add more to the pot. If I wait until 70, it’s an extra $500, but I would have to live a very long life to experience the advantages.
Figure out your tax liabilities. Non-qualified investments (not income tax deferred) are taxed at the capital gains rate. Qualified investments (401k etc) will be taxed at the rate relative to your income. Try to live in a state that does not tax SS benefits.
That said, SS is a horrible investment/Ponzi scheme. If I had put the same money in the stock market I would get 7x the return.
My wife started taking SS at age 62 on the advice of our CPA.
She continued to work 3 days a week versus the 4-5 days/week before getting SS until she was 73, a couple of years ago.
In spite of her early start of receiving SS, apparently due to her continuing contributions, she got increases on her monthly SS checks, that I didn’t get as I retired totally after turning 62.
If you continue to work be sure that your yearly income doesn’t exceed SS’s max yearly income after retirement. If it does, you will pay penalties.
The person your wife spoke to does not know what she is talking about.
Your SS is frozen at the amount it is when you take it.
A lot of this depends on your marriage status. You may have more options if you are widowed or divorced. This is more likely if your spouse worked and was older than you.
But lets say that you are and have always been single or you were the oldest or the bread-winner within your marriage. If that’s true you basically have a SS retirement age range of 62 to 70. After 62 you can retire and the amount you get is set at the date you chose to first receive your SS which increases as long as you put off your first SS check until you are 70.
Your benefit is determined by your 30 highest years of income subject to SS. So if you are still working at 62. Your SS income is growing both by the delay of each quarter you don’t take your benefit. And it goes up for each year you are making a greater amount of money than your lowest pay year.
If you could estimate how long you are going to live, then you could better choose a retirement date. If you don’t plan to live to 80 and want to stop working, you should take your money at 62. But if you are married, either you or your wife will likely live past 80, so its better to wait.
SS is hardly enough to live on. Some people have to, but most cannot. I would suggest the best thing to do is to keep working and to put off retirement as long as you can. If you need this money you would be better off still working if you can. When people say they need the SS check. I think they actually need to keep working. If that is not possible or you only work part time or you have some disability, by all means take the SS.
1. I wasn't sure how long Uncle Sam would be able to pay me my SS, given the state of the country's economy and fiscal well-being. Better to take it while you can before the SHTF.
2. I wasn't sure how long I would be around myself. No one does. Waiting until you're 66 or 72 to draw your SS does you absolutely no good if you die at age 64.
3. I calculated the difference between the amount I would draw at 62 versus the amount I would draw at, say 66 by waiting to draw at the older age. I took the "a bird in hand is worth two in the bush" approach. I realized it would take me until almost age 70 before I made up for the foregone income I would give up between age 62 and age 66 if I waited.
4. And finally, the time utility of money. A dollar in your pocket today, is worth more than that same dollar five or ten years from now (even without factoring any inflation, which makes the dollar today even more valuable). You can touch it, you can feel it in your pocket, you can spend it, you can save it, you can do what ever you want with it. The point is, you can use the dollar now instead of just thinking about using the dollar down the road sometime in the future.
So for me it was a no-brainer. I started drawing it right way and have never had regrets. The only thing that bothers me is that the government keeps trying to tell us there is no inflation and so therefore, there are no COLA increases like there used to be.
The bureaucrats who figure the inflation rate take out everything that the consumer has to pay for to survive, like food, gas, energy, housing before they run their calculations and then tell us there is no inflation. Anybody who has bought food or gas or electricity or a home aver the last 6-8 years, knows that there is inflation. The government doesn't want to officially admit to it though because it triggers higher mandated spending on their part. So it's to their benefit to artificially manipulate the rate to keep these mandated spending items, like SS COLA increases, to a minimum.
It is my understanding that there is an 8% reduction for each year that you take it before your “full” [benefit] retirement age, which for me is 66 years and 8 months since I was born in 1958.
There is I believe a ~5% yearly increase for each year you delay taking benefits after your “full” [benefit] retirement age.
I’d get about 17% more per year by waiting until age 70, but that is something I probably won’t be able to do since I would need money to pay for Medicare by age 67.
What I’ll probably do is to spend down to about $3,000 (except an IRA) by about age 62 and get SNAP “food stamp” benefits.
By age 65 I’ll just have my IRA (~$4,000). That will go for Medicare premiums. By age 67 I’ll have to take Social Security (unless I can get pre-Christmas retail work after age 65).
Older poor/low-income people:
1. spend down non-IRA money to $3,000 (age 60 cutoff) to get food stamps
2. find roughly enough work to pay essential bills (property tax, electric, Medicare premiums, etc.)
3. when you need money despite 1,2 get Social Security
The other way is to continue working....the company will deduct your SS payroll amounts and it will be added to the next years payments....Spokeshave who is 73 and still working.