Some people start taking Social Security benefits early to build up a savings account. If you’re planning to do this, it’s important to understand the long-term consequences of delaying Social Security benefits. This article discusses the best time for you to start receiving these payments. Read on for more details about when you should take your first benefit payment and what your benefit amounts could be like in retirement.
Social Security Income
If you receive Social Security income, you can start taking your retirement benefits as early as age 62. If you delay your payments until age 70, you’ll get larger checks for the rest of your life. These are much more substantial if you’re still working at that point and will be an important part of supporting yourself during your retirement years. The Social Security Administration (SSA) considers some factors when figuring out how much to give you. First, how old are you? And how much do you earn on average each year?
The SSA factors in your work history.
So if you retired by age 62 and worked part-time as an independent contractor at low wages, you may not feel like you’re getting a very good return on your investment. In this case, it might be best to wait until you reach age 70 before taking your first benefits to check. And you need to know that there’s no such thing as a free lunch. If you’ve delayed taking Social Security benefits and you’re not working, your check will be smaller than if you started receiving payments at age 62.
Social Security Income for Later Life
Suppose you plan to get a job after collecting your initial retirement benefits and want to postpone taking Social Security, or you’re looking for work and want to postpone taking your first Social Security check. In that case, you must understand the long-term consequences.
First, if you delay getting Social Security income for long enough, it could reduce the benefit you would eventually receive at retirement. The SSA bases its calculations on the current wage growth rate. If you do not increase your income, your benefit amount will be lower in the future.
Second, in most cases, delaying Social Security income will reduce your total lifetime earnings. If you delay collecting Social Security benefits, it can affect how much money you’ll have when you retire.
Social Security Retirement Benefits
The SSA also factors in your marital status and the years you have worked. If you’ve been married at least ten years and paid into Social Security since 1950, your benefit amount equals one-half of what a person who didn’t work would receive. You get this because work is the foundation of the program. And if you’ve never worked, the program is designed to support you.
For example, let’s say someone’s age 65 and has worked only the ten years required to collect benefits. If she has her first social security check by the full retirement age of 66, she’ll receive $1,000 a month beginning at age 66. Between that point and age 70, this amount increases by $1,000 yearly. The benefit amount would go up to $2,000 per month at age 70. This is how it works for someone who has never married but has been in the SSA system for a long period.
For widows and widowers, the Social Security benefits are calculated differently: The amount of benefits is calculated by averaging a person’s earnings record with that of his or her late spouse. For any amount above $1,000, a widow or widower will receive $1,000 per month for the rest of his or her life.
In conclusion, you must understand the long-term consequences of delaying Social Security income. If you decide to do this, it’s important to consider all factors and the best time to start collecting Social Security income. The SSA allows people to postpone making full Social Security payments until age 70 (for those who didn’t work enough years to qualify for early retirement benefits).