Paper Chase: Maximizing Social Security
When should you or your loved one take social security?
It was a very disappointing jobs report with only 142,000 jobs created. This was well below expectations of 200,000 jobs created. Previous months were also revised lower meaning this was not an isolated event.
The unemployment rate remained at 5.1%. Auto sales are at annual sales rate of 18.2% which is the best in a decade.
Social Security
I’m young and still have many more years to work. Why am I thinking about social security benefits? Well, deciding to collect the benefits early could cut my monthly check could be cut by 30%. Last year, 36% of men and 41% of women claimed benefits at 62, the earliest you can collect. You are only entitled to the entirety of your benefits if you wait to 66 or 67 depending upon when you were born. There is a huge upside to delayed gratification. If you can wait until age 70, you can increase your payment by 8% per year. This means your monthly payment could increase hundreds of dollars, and it could mean tens of thousands of dollars over the course of the life of your benefits.
It pays to wait for social security.
If you’re married, the individual claiming must be age 62 or older, the spouse must be eligible for benefits and have already filed to receive those benefits. If you’re divorced, benefits can still be claimed if the individual has not remarried, if you were married for 10 years and divorced for at least 2, and finally if the former spouse is at least age 62.
The lifetime benefits from social security range from $230,000 to over $710,000 depending upon how much you earn and you marital status. I suggest visiting www.ssa.gov, financialengines.com, and www.aarp.org. Figure out your benefits now while you are working so you’ll know how much you should be saving and investing. That’s right. You should be doing both.
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