What You Need to Know About Social Security Age Increases
If you’re turning 65 in 2019, there are some important decisions that’ll have to be made concerning your healthcare options.
2017 brought some important changes to Social Security. With the adjustments being based on your year of birth, there isn’t anything you can do to change your status.
Current rules and how they affect you
Here’s what you need to know:
- For those born between January 2, 1955, and January 1, 1956, the age at which you can collect your full benefit is 66 years and 2 months.
- Those born between January 2, 1955, and January 1, 1956, are eligible to receive permanently reduced benefits at the age of 62.
As the full retirement age is on the rise, the amount that is deducted from your benefits when claiming them early will climb as well.
Here’s what it means for you:
- While you may begin receiving benefits as early as age 62 and as late as age 70, the amount you receive will go up the longer you hold off. The longer you can continue to work, the better your financial benefit will be. A risk that is worth considering is not living long enough to pass the break-even date, which is the month when cumulative benefits from the delay of the claiming date match the amount that would have would have been received by claiming earlier.
- Retiring early will result in receiving a reduced benefit amount. Keep in mind that this reduction is permanent.
- The benefit your widow or widower will receive upon your death is affected by your retirement date. For example, if you take early retirement and then pass away, your surviving spouse will not receive their full benefit retirement amount. Their benefit is dependent on the number of your reduced benefits.
To retire early or not to retire early?
The increase in age for receiving Social Security benefits can have you questioning whether or not you should retire early or stick it out long enough to reach the age at which you could receive the highest benefits.
There are a lot of factors that go into such a decision and each person has unique situations to think about.
- The state of your and/or your spouse’s health. As people age, medical expenses tend to increase, whether it’s for preventative measures or some type of treatment; prescription costs alone can be prohibitive. If your health or the health of your spouse is compromised, or even if either of you has a family history of short life spans, it may not make sense to delay retirement.
- Other sources of income. Having additional sources of income may influence when you decide to retire. If you have enough to live comfortably now and into the future, it may be worth it to go ahead and take the plunge.
- Debt. A significant amount of debt can be a motivating factor to continue working up until the maximum benefit age. It can be difficult to pay off debt while existing solely on your Social Security benefits.
Take control of your future
Understanding the ins and outs of changing Social Security rules can give you a sense of ownership over your future. Knowledge is power!
InsureOne Benefits would be happy to assist you as you make plans for retirement.
Contact us today to see how we can help!
Are you beginning to wonder what choices will make the most sense for your later years?