For most retired Americans, their Social Security (SS) check is an integral part of their income. For the last 23 years, national pollster Gallup has conducted an annual survey to decipher how reliant retirees are on the income they receive from SS. Gallup found that 80% to 90% of respondents, including 88% of those polled in 2024, require their SS check to cover their expenses. Did you know that the age at which you begin collecting your SS benefit can have a huge impact on how much you’ll receive each month? Although retired-worker benefits can be collected as early as age 62, there's a monetary incentive to be patient. For every year a worker waits to collect their initial payout, beginning at age 62 and continuing through age 69, their benefit can grow by as much as 8%. Despite a wide variance in monthly payouts, there are clear-cut advantages and drawbacks associated with every traditional claiming age (62 through 70). However, these differences are especially pronounced at the earliest (age 62) and latest (age 70) traditional collecting ages. In December 2023, the Social Security Administration's Office of the Actuary (OACT) found that roughly 590,000 retired-worker beneficiaries were receiving an average of $1,298.26 at age 62. By comparison, just over 3 million beneficiaries took home an average check of $2,037.54 at age 70. This represents a 57% difference in average monthly payout between ages 62 and 70. (Note: this average benefit is based on the recipient's age, as of December 2023, and isn't necessarily indicative of the age they opted to begin receiving benefits, with the exception of age 62.) One of the downsides for taking your benefit at age 62 is that depending on your birth year, your monthly benefit will be permanently reduced by 25% to 30%. Early filers may also be exposed to the retirement earnings test, which allows the SSA to withhold some or all of their benefits depending on how much they earn. However, the 2024 Social Security Board of Trustees Report forecasts the depletion of the Old-Age and Survivors Insurance Trust Fund's (OASI) asset reserves by 2033. If the OASI's asset reserves are exhausted, sweeping benefit cuts of up to 21% may be necessary for retired workers and survivor beneficiaries in nine years. On the other hand, waiting eight years to initially claim benefits at age 70 will maximize what you'll receive monthly. Depending on the year you were born, collecting at age 70 will boost your monthly check by 24% to 32% above what you'd have received at your full retirement age. This can be a particularly attractive option for retirees in good health, but there's no guarantee that an age 70 claimant will live long enough to also maximize theirlifetime(key word!) benefit from SS. If you’re considering triggering your SS benefits but would like to weigh your options on when to do it, please feel free to call our office at (518) 584-2555 – we’re happy to help you with this decision! To read the full article, clickhere.
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