October 27, 2021 – The rules that govern social security benefits are complicated. Most people focus on their retirement benefits and may not be aware of disability and supplemental income benefits. Here are fundamental principles to get started:
- The bankruptcy of Social Security has been hyped by the media for many years. You can expect some modifications to preserve the benefit, but as a crucial lifeline for many Americans, it will survive for years to come.
- You can start collecting when you are 62 years old. If you need the cash flow to support your basic needs of daily living, file and take the benefit.
- Your Full Retirement Date, or FRA, is the date at which you will receive 100% of your allotted benefit, also known as your Primary Insurance Amount, or PIA. There are many benefits to waiting until your FRA to collect, including benefits for your spouse and the ability to continue earning wages.
- Delaying benefits beyond your FRA will increase the benefit by 8% per year, until the age of 70. An 8% guaranteed return is worthwhile, but your expected longevity needs to be considered.
- Typically, the “break-even” age to defer collecting benefits is approximately 81 years old. Yet another reason to stay healthy!
- Finally, your social security benefit not only provides retirement support for you, but also for your spouse, if married, and ex-spouse if you were married for 10 years and your ex has not remarried. The impact on spousal benefits should be considered while making your benefit decision.
Please contact us with any questions, and feel free to pass along this information to family or friends who may have questions related to social security benefits.