Social Security and Retirement Planning

When making plans for retirement, it's important to spend some time thinking about how social security will fit into your plans. It's possible to start social security benefits at the age of 62. The earlier you begin receiving social security, the less money you'll receive on a monthly basis. Those who elect to receive social security benefits at 62 experience a permanent reduction in benefits.

Some people find this to be perfectly acceptable, and are willing to take a lower payment amount in order to be able to get their retirement benefits at an younger age. However, many people choose to postpone the age at which they elect to receive social security benefits so they'll be able to receive a higher check each month. They won't start receiving benefits as early in life, but they'll get more money on a monthly basis once they do begin getting social security.

The benefit reduction in social security is based on how old you are when you elect to receive benefits and when you were born. Currently, people who elect to receive benefits at the age of 62 who were born after 1959 is 30 percent. This means that individuals born in 1959 or later who start getting social security when they're 62 will receive 30 percent less each month than individuals born in the same time frame who wait to begin receiving benefits once they reach the full retirement age.

If you want to avoid having to deal with a reduction in benefits, the answer is to put off getting your social security until you actually reach the full retirement age. Once you reach 70 years old, you will not continue to accrue additional social security benefits. That's why most people choose to go on social security no later than the age of 70. It's up to you to decide if you'll be better off drawing reduced benefits at the age of 62, or if you should wait until you are closer to, or actually reach, full retirement age.

retirement planning advice

"...we used this site to help us plan our retirement. Thanks for all the great free advice"

-Jan & Peter Molenar, CA,