Most everyone worries if they will have enough income at retirement and Social Security is one of the pillars needed for a comfortable retirement. One of the biggest mistakes we often make is collecting social security at age 62. That mistake alone can cost over hundreds of thousands of dollars. The reason? By waiting until age 70 to collect your social security benefits you are increasing your payments dramatically.
Every year you delay collecting, to generally age 70, you are increasing your benefits by 8%. Where else are you going to get a guaranteed 8% return. Before making a decision consider this.
- Your life expectancy. At age 65 men live to be 82 and women to be 85. Everyone is different. Make your decision based on your own situation.
- Your marital status. If your single and are seeking to gain as much as possible from the system then at age 80 all options and the cumulative benefits are all equal. But after age 80 if you waited to age 70 your benefits will be paid at the higher amount, whereas, I would remain at the lower amount from collecting at age 62.
- Your income. If married and both of you work, one earns substantially more, and you expect at least one of you will live to age 80 then the high wage earner should wait and the other start collecting, if needed. Added benefit: If the high wage earner should die first, the surviving spouse benefits can take all of his benefits instead of hers.