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8th October 2010, 10:45 AM
When Should You Apply for Social Security?
by Barbara Whelehan
Friday, October 8, 2010
Retirement planning is complicated, beginning with the decision about when to begin taking your Social Security benefits. On one hand, if you need the money and don't expect to live into your 80s, it is tempting to take Social Security as early as possible — at age 62 — to benefit from the income stream. On the other hand, you can increase your monthly payment considerably by waiting until age 70. Most people underestimate how long they are going to live.
More from Bankrate.com:
• Crazy Ways to Save Money
• 5 Ways Social Networking Saves Money
• Best iPhone Finance Apps
"I like to frame the Social Security benefits issue discussion with my clients by offering a definition of it as an inflation-protected joint and survivor annuity backed by the U.S. government," says Tim Kober, a Certified Financial Planner with Cedar Financial Advisors in Portland, Ore.
"This provides context for the 'when to claim' question," he says. "The present value of Social Security payments is equal over your expected lifetime, regardless of when you claim it. If, as Clint Eastwood would say, 'You're feeling lucky,' claiming late makes sense."
Differences in Benefits Can be Substantial
As a first step in this retirement planning exercise, find out approximately how much of a monthly benefit you'll get under different scenarios. Use Bankrate's Social Security calculator to get an estimate; actual benefits will depend on your personal work history. For a more accurate idea, the Social Security website offers a secure retirement estimator calculator.
As an example, the table below illustrates the monthly benefit due to a fictitious worker at various ages. If the worker waits until full retirement age, his or her monthly income will be about 63 percent higher than if he or she begins drawing benefits at age 62 -- his or her earliest opportunity. If the worker waits until age 70, his or her monthly income from Social Security will be more than double the amount collected at age 62
A lot more here.......> http://finance.yahoo.com/focus-retirement/article/110909/when-should-you-apply-for-social-security.html?mod=fidelity-livingretirement
by Barbara Whelehan
Friday, October 8, 2010
Retirement planning is complicated, beginning with the decision about when to begin taking your Social Security benefits. On one hand, if you need the money and don't expect to live into your 80s, it is tempting to take Social Security as early as possible — at age 62 — to benefit from the income stream. On the other hand, you can increase your monthly payment considerably by waiting until age 70. Most people underestimate how long they are going to live.
More from Bankrate.com:
• Crazy Ways to Save Money
• 5 Ways Social Networking Saves Money
• Best iPhone Finance Apps
"I like to frame the Social Security benefits issue discussion with my clients by offering a definition of it as an inflation-protected joint and survivor annuity backed by the U.S. government," says Tim Kober, a Certified Financial Planner with Cedar Financial Advisors in Portland, Ore.
"This provides context for the 'when to claim' question," he says. "The present value of Social Security payments is equal over your expected lifetime, regardless of when you claim it. If, as Clint Eastwood would say, 'You're feeling lucky,' claiming late makes sense."
Differences in Benefits Can be Substantial
As a first step in this retirement planning exercise, find out approximately how much of a monthly benefit you'll get under different scenarios. Use Bankrate's Social Security calculator to get an estimate; actual benefits will depend on your personal work history. For a more accurate idea, the Social Security website offers a secure retirement estimator calculator.
As an example, the table below illustrates the monthly benefit due to a fictitious worker at various ages. If the worker waits until full retirement age, his or her monthly income will be about 63 percent higher than if he or she begins drawing benefits at age 62 -- his or her earliest opportunity. If the worker waits until age 70, his or her monthly income from Social Security will be more than double the amount collected at age 62
A lot more here.......> http://finance.yahoo.com/focus-retirement/article/110909/when-should-you-apply-for-social-security.html?mod=fidelity-livingretirement