Wednesday, 07 January 2009
When to Sign Up for Social Security
The leading edge of the baby boomer generation turns 63 this year. Last year, at age 62, the oldest boomers became eligible for early Social Security, so there is an important question about when to sign up.
The Social Security website has recently launched a new Retirement Estimator that will calculate your monthly benefit, based on your actual earnings, at different retirement dates. The amount is an estimate due to various parameters used, but it isn’t far off and is a big help in deciding when to retire.
Sixty-five was once the absolute age for full benefits for everyone, but the SSA has been gradually raising the age to 67, depending on year of birth. I, for example, born in April 1941, was not eligible for full benefits until age 65 and eight months – October 2006. (See my story about the Social Security ritual I created for myself here.)
There is a good-sized monetary benefit for delaying benefits. Every year you wait between ages 62 and 65, your monthly payment increases by five or six percent. After age 66, each additional year adds about eight percent.
If you can wait until age 70 your benefit, compared to age 62, increases by about $1,000 per month. $12,000 a year is a big difference.
Of course, many factors, personal and professional, enter into the decision: whether you have another pension plan, whether you have a job or have been laid off, investments, your health, the amount of debt you are carrying, etc.
The Social Security Retirement Estimator is a useful, new tool to show you your benefit at different ages and help you make the decision.
[At The Elder Storytelling Place today, Lia tells the tale of family secrets and denials in I Just Got Off the Phone.]