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Collect Now, or Later? Timing Your Social Security Benefits

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interesting article in today's (7/11/2009) nyt:

...the bigger risk is that you will live to a ripe old age. you can claim social security any time from age 62 to 70, but the longer you wait, the larger your monthly check. and many people come out ahead if they wait at least until their full retirement age, which is different from the day you stop working for good. for people born 1943 to 1954, full retirement age is 66, and it creeps up for younger people.

 

what do you stand to lose by taking benefits early? take those who are set to receive $1,000 a month at their full retirement age. if they sign up for benefits at age 62, they will collect only $750. but if they wait until 70, they will earn extra credit and receive up to $1,320 a month-nearly a third more...

 

consider a single person with $200,000 in savings returning 5 percent a year. instead of taking social security at age 62, she withdraws $19,000 annually until she turns 66. her savings will last until age 94, but she will still have $21,000 a year in social security benefits. if she claimed at 62, her savings would run out at age 87 and she would be left with only $16,000 a year in social security...

 

to get a more precise idea about how to maximize your benefits, go to the social security's retirement estimator, which uses your actual earnings record in its calculation. (click on "create scenarios" to how retiring at different ages affects benefits). analyzenow.com offers calculators that will help determine the best time for singles and couples to take social security...

 

http://www.nytimes.com/2009/07/11/your-money/11retire.html?_r=1&th&emc=th

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Excellent article. Sometimes our eyes can glaze over while reading such dry material as Soc. Sec. but all of us "third agers" should begin to learn about this. There are complications to every scenario; divorce, marriage, re-marriage, death of spouse, etc. Better to get informed now rather than wait until actual retirement age.

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I have been interviewing family caregivers for my disseration research. My first participant was 88 with a 105 y.o. mother. The second was 85 with a 103 y.o. mother. In both cases, there had been careful savings done, but no one expected them to live that long, and it was not figured into the calculation. Even with some of my younger care recipients (80's) there was concern regarding their being able to afford their living situation (private pay assisted living) until death -- and these were all people on hospice!

The point is that the avearge age span is increasing, and thinking in terms of how long one is going to need that money can make a difference.

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