Social Security is the cornerstone of retirement security for the vast majority of Americans. If you’re nearing retirement age, then you’re probably wondering when to start claiming Social Security benefits.
First, the good news.
After months of haggling over the debt ceiling and the federal deficit in Congress, and the threats to cut seniors’ earned benefits, Social Security remains intact.
In fact, Social Security can pay all promised benefits until 2036 and roughly 75 percent of benefits after that.
Second, more good news. You’re planning for retirement.
You’re eligible for Social Security, which is the largest source of income for most retirees, at age 62, but many people wait until later and some even wait until they are nearing 70 to claim their benefits.
“Retiring early may have its appeal, and in some cases can’t be avoided, but the longer you wait to claim Social Security, the higher your benefits will be,” said Earl Williams, AARP Louisiana Executive Council member.
Choosing when to retire is a personal decision, one in which factors like how long you want to work, how much money you have in savings and your family circumstances have to be considered.
Social Security gives almost all Americans a guaranteed, life-long source of retirement security income that keeps pace with inflation. On average, however, Social Security benefits amount to only 40 percent of preretirement earnings. This percentage could be more or less depending on your earnings while you worked and at what age you claim Social Security.
88.6% of Louisiana seniors received Social Security in 2010 and the average annual benefit was only $12,600. Social Security keeps middle income older Louisianans from falling into poverty. But Social Security alone is probably not enough for you to live on in retirement.
Any additional money you may need in retirement has to come from personal savings and retirement funds. The good news is that when you retire you might not need as much income as when you worked. That’s because you’ll no longer have to save for retirement, you might not be contributing to Social Security through payroll taxes and if you’re lucky, your mortgage might be paid off or be close to being paid off. Experts say you will need income equal to about 75 percent of your earnings to maintain your current lifestyle in retirement.
Here is a look at the monthly benefits of a person born in 1952, whose full retirement age is 66, and who made $40,000 a year and began to collect benefits at age 62, 66, and 70.
Age of Retirement: Monthly Benefits
When making an informed decision on when to retire, you should consider a few things:
- Your health status
- The amount you have saved for retirement
- Current economic needs
- Your retirement lifestyle