Best Time to Take Social Security Benefits
Is 70 the new 65 when it comes to retirement? Yes, according to a recent paper from the Center for Retirement Research at Boston College. Alicia Munnell wrote: “Given that Social Security is a particularly valuable type of income — inflation-adjusted and lasts for a lifetime — it generally makes sense for workers to postpone claiming (benefits) as long as possible to get the highest monthly amount, assuming they are in good health for their age.” A retiree who is projected to receive $1,000 from Social Security at normal retirement age of 66 would receive $750 per month if he starts payments at age 62. The same person would receive $1,320 per month if he delays payments until age 70. Therefore, the choice is a no-brainer according to Munnell. However, if you do the math, taking payments at age 62 of $750 per month results in $72,000 in the bank before reaching age 70. At $570 per month difference ($1,320 – 750), it would take 127 months before the choice to take the $1,320 per month over the $750 would break even. At that point, the recipient would be almost 81. So, the bottom line is, if you think you will live well into your 80’s and don’t need income in your 60’s, you are wise to defer until age 70. But if you don’t think you will live to be 81, you are wiser to take a reduced benefits starting at 62. As you might expect, taking the $1,000 at 66 is a safer compromise. The break-even point would be at age 78. It is no surprise then that the average life expectancy in the U.S. is 78.7 according to a 2010 report from the CDC Department of Vital Statistics. For more information, go to: http://www.ssa.gov/pubs/EN-05-10147.pdf
Thanks to Ira M. Leff Attorney at Law Atlanta, GA www.IraLeff.com