Hello FaceBook Friends. This message is especially for those of you of a certain age not unlike myself, who may be fast approaching the time when you can start drawing Social Security. The question becomes, should I start drawing Social Security monthly benefits at the earliest age, which is 62, or should I wait until full retirement age of 66? Now, everyones situation is different, but I would just like to share what I just spent over an hour calculating. I reviewed my annual statement from the Social Security Administration and found the dollar amount of my monthly benefits if I start drawing them at age 62 and then I found the dollar amount of my monthly benefits if I wait and put off drawing them until age 66. It seems that everyone I have ever talked to about this says that it is better to wait until age 66 because you receive a larger monthly check. Well, that would seem obvious, but is there more to it than that? In my case, for instance, I will draw almost $300 more each month if I wait until age 66 than I will draw each month if I start collecting it at age 62. So, waiting until age 66 is obviously the way to go. Or is it? I got to thinking: What if I dont live much past age 66? Neither of my granddads lived to be age 60. If I start drawing at age 62, I have a four year head start on my benefits than if I wait until age 66. So, this made me wonder if I could calculate the age that would be the break even point when I would actually draw more TOTAL benefits by waiting until age 66 than by starting at age 62. I mean, I know that I will draw more each month at age 66, but keep in mind how much I will have already collected in the first four years between age 62 and age 66. So, I got out my handy dandy little calculator and got to work. Repeating that each persons situation is different depending on their income over the history of their work life because that affects the amount of each persons monthly benefits, but the trend should be pretty much the same for everyone. Here is what I found: Up until the age of 78, I will clearly receive MORE TOTAL money by starting to collect my retirement benefits at age 62, even though the monthly check will be smaller. If I should die before reaching age 78, I will have received a LOT more money by starting at age 62. If I should live to be 79, the total amount collected is about the same whether I start collecting at age 62 or at 66. Only when I hit age 80 will the total amount collected be more if I wait until age 66 to collect benefits and the older I live past age 80, the wider the spread between the two total amounts becomes. A person who lives into their 90s will receive a great deal more money by waiting to draw their retirement at age 66. So, bottom line, if you are reasonably certain that you will still be out playing golf at age 90, then by all means, put off collecting your Social Security until you hit age 66. HOWEVER, if you think it more likely that you may leave this lovely orb before you are age 75 or so, it might be far, far more sensible to start collecting at age 62. No one has a crystal ball, but there are websites with Life Expectancy Calculators that can help you make a more educated guess based on health habits and family history. I looked at bankrate/calculators/retirement/life-age-expectancy-calculator.aspx and found that my current life expectancy is 78. Therefore, it might be to my advantage to start drawing Social Security benefits at age 62. Even if I make it to 80, Ive always felt a bird in the hand is worth two in the bush (bad analogy, but you get the idea). I just want to urge everyone to do the math before they listen to all these folks saying to put off collecting benefits until age 66. Now, wouldnt you just hate to put off benefits until 66 and then drop dead at 67? My research shows that putting it off is really not the best choice for many people. I hope this post helps some people take the first step toward a comfortable retirement. Good Luck!
Posted on: Wed, 13 Aug 2014 05:43:00 +0000
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