February 2, 2009
More than 91% of current retirees receive monthly benefits from the government program referred to as Social Security. The program is very important to seniors, as nearly three out of five retirees receive at least half of their income from Social Security. Furthermore, pensions and other related safety nets that were once commonplace have and continue to disappear from the workplace. As such, it is imperative that individuals understand their options as to when they should commence receiving Social Security retirement benefits.
Individuals must wait until their full retirement age in order to draw non-reduced Social Security benefits. For baby boomers, (defined as those born between 1943 and 1954,) full retirement age is at age 66. The threshold is increasing gradually until it hits 67 for workers born in or after 1960. However, an individual may elect to receive Social Security retirement benefits at age 62, which is what approximately one-half of workers do elect. But, if an individual elects to receive retirement benefits at age 62, there will be a permanent reduction in the amount of monthly benefits the individual can receive.
For example, if your full retirement age is 66, and if you file for benefits at 62, your monthly check will be reduced about 25% from your full benefit; file at 63, the reduction is about 20%; file at 64, the reduction is about 13.3%; file at 65, and the reduction is about 6.7%. But, in the event that a person delays receiving Social Security benefits until after full retirement age, the retiree gets a bonus in the form of delayed retirement credits. These annual increases apply for each year that a retiree delays retirement, up until the age of 70 years old.
There are several factors that an individual should weigh prior to deciding the proper age to receive Social Security benefits.
You may read more at the link below.
by: Todd C. Ratner, Esq.
February 2, 2009