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31/07/08 11:45 Filed in: Biggest Social Security Benefits
Find Your (SOCIAL SECURITY) Break-Even Age
Many factors enter into finding the right start-date to maximize your total lifetime benefit. They include whether you plan to earn income from work after age 62, your health status and family medical history, and the amount and type of retirement resources you and your spouse will have to live on in addition to Social Security.
The difference in the amount of benefits you actually receive over the years derives from some basic Social Security rules. First, you may start collecting payments at age 62, but for the rest of your life the only benefit increase you'll receive is the cost-of-living–adjustment (COLA). Second, the longer you wait to start your benefit, the higher your monthly take will be—up until age 70. That's because each year you get an additional benefit bump up. Between your full retirement age (between 65 and 67, depending on the year you were born, which you can check here and age 70, the extra money amounts to about 8% a year. Finally, if you wait until age 70, there's no incentive to delay the benefit. The only future increases you get will be from the COLA, which applies to all Social Security benefits.
This may sound terribly complicated to figure out. But there is one simple exercise you can do to move you closer to an answer: Use the Social Security Web site calculator to come up with your "break-even age." That's the age when, if you start taking your benefit, you are likely to end up receiving the greatest amount of money from Social Security over your lifetime.
Many factors enter into finding the right start-date to maximize your total lifetime benefit. They include whether you plan to earn income from work after age 62, your health status and family medical history, and the amount and type of retirement resources you and your spouse will have to live on in addition to Social Security.
The difference in the amount of benefits you actually receive over the years derives from some basic Social Security rules. First, you may start collecting payments at age 62, but for the rest of your life the only benefit increase you'll receive is the cost-of-living–adjustment (COLA). Second, the longer you wait to start your benefit, the higher your monthly take will be—up until age 70. That's because each year you get an additional benefit bump up. Between your full retirement age (between 65 and 67, depending on the year you were born, which you can check here and age 70, the extra money amounts to about 8% a year. Finally, if you wait until age 70, there's no incentive to delay the benefit. The only future increases you get will be from the COLA, which applies to all Social Security benefits.
This may sound terribly complicated to figure out. But there is one simple exercise you can do to move you closer to an answer: Use the Social Security Web site calculator to come up with your "break-even age." That's the age when, if you start taking your benefit, you are likely to end up receiving the greatest amount of money from Social Security over your lifetime.