Your Social Security full retirement age is 67-67 for those born in 1957 or later. The full retirement age ranges from 67 to 67 and ten years for those born before 1957. Consult the appropriate chart to assist you determine the right age to retire. Retiring early is not a good choice as it means that you will be taxed heavily at retirement. Hence, it is wise to wait until a later age to start saving for retirement.
You have a number of years before you need to retire, however, before choosing your social security full retirement age, it is important to determine what you want to do with your benefits. Do you want to use them to supplement your retirement income? If so, then you should retire as soon as possible. On the other hand, if you want to use your benefits as a source of income, then it is advisable to wait until the full age of 70 for your benefits to begin accruing. In this way, you can use your payments to buy investment properties, pay for high-end medical treatment or simply save for a comfortable retirement.
One option for increasing the amount of money you can save for retirement is to claim benefits early. The earlier you start, the larger the lump sum you can receive. Usually, you have three years after full retirement age before you can request to receive an equal monthly amount instead of the actual cash value of your benefits. However, this is a case where the law of large returns applies. This means that the larger the lump sum you claim, the larger your monthly savings will be.
If you decide to delay retirement ages, there are certain consequences that you would face. The most common one is a higher monthly pension. Most people would get a larger monthly pension if they delay their retirement age by three years. However, if you are very old, you would still get the same monthly amount even at a much older age. So, it is advisable not to delay your retirement age.
Social Security Benefits
However, if you delay your retirement age by three years, you would only be taxed once every two years. This is because Medicare already includes income taxes when you become eligible for Medicare. Thus, delaying your eligibility to Medicare is not really a burdensome thing to do. However, if you become eligible for Medicare at an older age, then you would have to immediately begin paying income taxes. If you are still working during your retirement, then you would have to immediately stop working so that you can continue paying the taxes on your own.
Another option available for those wanting to save for retirement is to claim your survivor benefits based on the date of your birth. Usually, if you are born on or before the full retirement age, you will get full spousal benefits and if you are born later, you will only receive half of the spousal benefits. However, if you are still working at that time, you can claim survivor benefits for the month that you are no longer employed by your employer.
One more option for those who wish to save for their retirement is to claim their death benefits based on the birth year of the deceased person. Usually, if the person is born within one of the six regular retirement years, he or she will get one hundred percent death benefit. However, if the person is born later in the year, he or she would get only half of the death benefit. For those who are still working at that particular company, they should claim their death benefit at the end of the year or the beginning of the next year. In addition, if you have already stopped working at the particular company and you have not retired yet, you can also claim your death benefit for the month that you were still employed.
In the End
You also have a choice when it comes to the Social Security Defined Benefit Plan. Under this plan, you can choose the benefit amount based on your personal retirement income. However, if you do not choose the right benefit amount at the right time, you could end up losing much of your money. One option that you have is to take the standard benefit and then increase it by $1.5 for every month that you live beyond the retirement age of the plan. Another option is to take a lump sum benefit and save it for retirement. Both of these options should be considered carefully so that you do not lose too much of your savings.