When should you draw on Social Security to max out the benefits?
Aging Matters

It's a traditional question that most people at retirement age want to know. At age 62, I wondered about the same thing. Should I withdraw now or wait? I took the question to the local Social Security office to find out. What's surprising, the agent offered a good deal of encouragement to move ahead now and not wait. She answered too quickly without asking questions, and that piqued my curiosity. So I researched more online. And it's a good thing too because the first place I landed was on a Financial Planning website. The first page instructed, "Retirees should count on Social Security benefits to provide only 40 percent of what they'll need after retirement."

Here are other things that may delay your decision to take Social Security early on. Beware of these facts:

The milestones of Social Security benefits

  • The minimum age to claim benefits is 62, but you'll qualify for only 75% of the monthly benefit because you're taking them 48 months sooner.
  • At 65, you'll receive 93.3% of the benefit because you're getting them 12 months earlier.
  • At 66, you're at the full retirement age and will receive 100%.
  • At 67, you'll get 108% of the benefit because you delayed them for 12 months.
  • At 70, you'll get 132% of the benefit because you delayed them for 48 months.

Can a person keep working and receive Social Security benefits at the same time?

The answer is yes, but there are limits to how much you can earn. It's the reason for my delay to receive Social Security until 66. But if you are 66 (full retirement age), you can keep all of the benefits, no matter how much you gross (earn.) If you're younger than 66 throughout the full year of 2015, there is a limit on how much you can earn and still receive Social Security. They will reduce the benefits by $1 for each $2 earned above $15,720.

However, the amount reduced is not lost forever. Your benefit increases at full retirement age to account for the money deferred. Plus, if you work for someone else, all the wages count toward Social Security's earning limits. But if self-employed, then they calculate the net income because you can deduct the business expenses.

Other income sources that do not count as earnings are investment assets, interest, retirement funds or pensions, annuities, capital gains and other government assistances.

If you have questions or want to apply for benefits, visit www.socialsecurity.gov and open My Social Security account. Or call 1-800-772-1213, or TTY number 1-800-325-0778.

Part of the Aging Matters Weekly Syndicated Column

Aging Matters is a weekly column tackling everyday challenges that our growing elderly population and their loved ones face. It is also published in a variety of syndication partners including newspapers all over the country.

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