Mark D. Goldstein, CFP©
Certified Financial Planner
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Have a great weekend!
P.S. If you decided to start your Social Security benefits at age 62 because you believe that the system will fail, I'm afraid your paranoid conspiracy mind has taken over your rational financial mind.
(By the way, folks, it's not written in stone that you have to start your Social Security benefits when you leave your job. It might even be smart to use some of your retirement savings and investments to cover the bills for a while in order to let your Social Security benefits grow [But don't expect to get that kind of advice from your typical broker/investment advisor. After all, less "assets under management" would cause their commissions and fees to drop and, I should add... many financial planners and other advisors are almost entirely in the dark regarding Social Security to begin with!]).
Look, if I could give you just one word of advice about when to sign up for Social Security, it would be... WAIT.
And here's the compelling arithmetic:
You can claim your retirement benefits as early as age 62, but if you wait until your "full retirement age" (probably 66 for most of you), your monthly check will be 33% higher. If you wait until 70, your check will be 76% higher, compared to what you would have gotten at 62 (that's a guaranteed 7.32% annual rate-of-return). And, in addition, you'll be credited with annual cost-of-living increases.
Even more compelling, if you're married and wait until 70 to claim your benefits, you're not only building a larger future income stream for yourself... you'll be leaving a lot more income to a surviving dependent spouse if you die first!
I was tempted to end this article now, but just in case those doomsters are still scaring and confusing you, I'll continue to say a little more.
The worst that can happen, if no changes are made to the program, is that benefits will drop by 25% around 2034 (which, alas, is probably getting close to the expiration date for many of us). At that level, current payroll taxes will be able to fund Social Security pretty much indefinitely.
But I don't think benefits will drop. Instead, there will be "tweaks" that reduce your benefits' future growth (particularly for those with higher incomes).
Remember, Social Security keeps millions of seniors out of poverty... and saves millions of adult children from having to support Mom and Dad.
No president, no Senate and no Congress will ever let those voters down!