By waiting to claim your benefits, you can maximize the income you take home in retirement. While there are some instances where you might want to claim your benefits earlier than normal retirement age, it’s usually recommended to wait until you reach this age (or at least as close as possible).
How Normal Retirement Age Affects Your Income
If you begin taking your Social Security benefits before you reach normal retirement age, they will be reduced. If you delay taking out your benefits, they will increase each year until you reach age 70.
It’s important to know that what you claim is permanent. So, if you start taking your benefits at 62 years, you could see up to a 30% reduction in your monthly payments. These payments will stay the same throughout your retirement.
Because the full retirement age can change depending on when you were born, here’s a handy chart from the Social Security office to refer to. Find the year you were born and it will tell you when your full retirement age is.
Should You Wait for Full Retirement Age to Claim Your Benefits?
You can start collecting your benefits as early as 62 years, but your monthly check will be lower. So what is the best option - do you start taking your benefits now or wait?
It all depends on your personal circumstances. There is no “correct” age for everyone to take their benefits, so the rule of thumb is to wait as long as you can afford to. This way, you can take home the most money.
Health status, longevity and retirement lifestyle are three factors to consider when choosing when to claim your benefits. If you have a chronic illness or medical condition and are not expected to have a long life, claiming your benefits at 62 might be the best option. For every year you delay benefits up to age 70, you’ll get an 8% increase.
Grow Your Wealth - Find Out When the Best Time to Claim Your Benefits Is
Because each person’s circumstances are unique, it’s in your best interests to talk to a retirement planner in New Jersey. They’ll be able to look at your total financial picture and determine when the best time to claim your benefits is.
Leonard Financial Solutions will help you navigate the complex Social Security system, maximize your benefits and ensure you’re making the right choices for today and the future. Contact us today for a free consultation.