The majority of retired Baby Boomers –
65 percent – currently rely on Social Security benefits, and nearly one-third
say they wouldn’t be able to live comfortably in retirement without them,
according to an Investor Index Survey released
by TD Ameritrade Holding Corporation.
However, determining when to sign up for Social Security can
be complicated. The longer you wait, the higher your monthly payments will be.
The Social Security Administration’s Retirement Estimator is
a tool that can help you.
The Retirement Estimator gives estimates based on your actual Social Security earnings record. You won’t be
able to get your actual benefit amount until you apply for benefits.
Here are factors that can change the amount of your benefits:
- You choose to get benefits before your full retirement age. You can begin to receive Social
Security benefits as early as age 62, but at a reduced rate. Your basic benefit
will be reduced by a certain percentage if you retire before reaching full
retirement age.
- You are eligible for cost-of-living benefit increases starting with the year you become age 62. This
is true even if you don’t get benefits until your full retirement age or even
age 70. Cost-of-living increases are added to your benefit beginning with the
year you reach 62 up to the year you start receiving benefits.
- You delay your retirement past your full retirement age. Social Security benefits are increased
by a certain percentage – depending on your date of birth – if you delay
receiving benefits until after your full retirement age. If you do so, your
benefit amount will be increased until you start taking benefits or you reach
age 70
So, you need to think carefully about when you’ll begin taking Social Security.
If you need help, a certified financial planner is often a good option for getting a
recommendation.
To find a certified financial planner near you, visit the website of the Certified Financial
Planner Board.
