Social Security and When to Take It?
Over 62% of retired workers rely on Social Security for more than half of their monthly income! Your working income for at least 35 years will determine how much Social Security will pay each month at retirement.
At full retirement age, seniors can collect all of their monthly payout, whereas those who choose to take out early will accept a permanent reduction. While 67 is generally full retirement age, Social Security rewards those who wait even longer increasing the monthly payout by 8% for every year waited!
Now it may seem like waiting is the way to go – what’s another year or two for a significantly higher payout? And I would agree with you! But taking a quick look at the Social Security’s short and long term outlooks for the program shows that claiming early may not be such a big mistake. In the next 15 years, the program is expected to spend more than it earns, leading to a potential 23% cut to benefits.
So what’s the right move? Wait it out and hope things improve financially for Social Security? Try to beat the system and get what you can, while you can? Generally it has been shown that those who wait reap greater benefits, but then again, Social Security has never spent more than they bring it.
Either way, Social Security is only one form of potential income during retirement. Those who plan correctly can count on cash flow from other sources. Not sure what the best route is? Reach out today and learn about your options!
Thanks to Motley Fool for the great information!