Social Security At 62 PC1366-Print

RETIREMENT PLANNING

SOCIAL SECURITY

Is 62 your lucky number? If you’re eligible, that’s the earliest age you can start receiving Social Security retirement benefits. If you decide to start collecting benefits before your full retirement age, you’ll have company. According to the Social Security Administration (SSA), approximately 73% of Americans elect to receive their Social Security benefits early. (Source: SSA Annual Statistical Supplement, 2014). Although collecting early retirement benefits makes sense for some people, there’s a major drawback to consider: if you start collecting benefits early, your monthly retirement benefit will be permanently reduced. So before you put down the tools of your trade and pick up your first Social Security check, there are some factors you’ll need to weigh before deciding whether to start collecting benefits early. WHAT WILL YOUR RETIREMENT BENEFIT BE? Your Social Security retirement benefit is based on the number of years you’ve been working and the amount you’ve earned. Your benefit is calculated using a formula that takes into account your 35 highest earnings years. If you earned little or nothing in several of those years (if you left the workforce to raise a family, for instance), it may be to your advantage to work as long as possible, because you’ll have the opportunity to replace a year of lower earnings with a higher one, potentially resulting in a higher retirement benefit. If you begin collecting retirement benefits at age 62, each monthly benefit check will be 25% to 30% less than it would be at full retirement age. The exact amount of the reduction will depend on the year you were born. (Conversely, you can get a higher payout by delaying retirement past your full retirement age – the government increases your payout every month that you delay retirement, up to age 70). However, even though your monthly benefit will be 25% to 30% less if you begin collecting retirement benefits at age 62, you might receive the same or more total lifetime Social Security benefits as you would have had you waited until full retirement age to start collecting benefits. That’s because even though you’ll receive less money per month, you might receive more benefit checks. The following chart shows how much an estimated $1,000 monthly benefit at full retirement age would be worth if you started taking a reduced benefit at age 62. If you want to estimate the amount of Social Security benefits you will be eligible to receive in the future under current law (based on your earnings record) you can use the SSA’s Retirement Estimator. It’s available at the SSA website at socialsecurity.gov. You can also sign up for a my Social Security account to view your online Social Security Statement at the SSA The Commerce Trust Company Tiffany Charles Wealth Management Consultant 8000 Forsyth Blvd St. Louis, MO 63105 314-746-3609 tiffany.charles@commercebank.com commer etrustcompany.co Social Security: What Should You Do at Age 62? Is 62 your lucky number? If you're eligible, that's the earliest age you can start receiving Social Security retireme t benefits. If you decide to start collecting benefits before your full retirement age, you'll have company. According to the Social Security Administration (SSA), approximat ly 73% of Americans elect to receive their Social Security benefits early. (Source: SSA Annual Statistical Supplement, 2014) would have had you waited until full retirement age to start collecting benefits. That's because even though you'll receive less money per month, you might receive more benefit checks. Social Security: What Should You Do at 62?

The following chart shows how much an estimated $1,000 monthly benefit at full retirement age would be worth if you started taking a reduced benefit at age 62. BIRTH YEAR FULL RETIREMENT AGE BENEFIT 1943-1954 66 years $750 1955 66 years, 2 months $741 1956 66 years, 4 months $733 1957 66 years, 6 months $725 1958 66 years, 8 months $716 1959 66 years, 10 months $708 1960 or later 67 years $700 Source: Social Security Administration If you want to estimate the amount of Social Security benefits you will be eligible to receive in the future under current law (based on your earnings record) you can use the SSA's Retirement Estimator. It's vailable at the SSA website at socialsecurity.gov. You can also sign up for a my Social Security account to view your online Social Security Statement at the SSA website. Your statement contains a detailed record of your earnings, as well as estimates of retirement, survivor's, and disability benefits, and

website. Your statement contains a detailed record of your earnings, as well as estimates of retirement, survivor’s, and disability benefits, and other information about Social Security. If you’re not registered for an online account and are not yet receiving benefits, you’ll receive a statement in the mail every five years, from age 25 to age 60, and then annually thereafter. HAVE YOU THOUGHT ABOUT YOUR LONGEVITY? Is it better to take reduced benefits at age 62 or full benefits later? The answer depends, in part, on how long you live. If you live longer than your “break-even age,” the overall value of your retirement benefits taken at full retirement age will begin to outweigh the value of reduced benefits taken at age 62. You’ll generally reach your break-even age about 12 years from your full retirement age. For example, if your full retirement age is 66, you should reach your break-even age at 78. If you live past this age, you’ll end up with higher total lifetime benefits by waiting until full retirement age to start collecting. However, unless you’re able to Although collecting early retirement benefits makes sense for some people, there's a major drawback to consider: if you start collecting benefits early, your monthly retirement benefit will be permanently reduc d. So before you put down the tools of your trade and pick up your first Social Security check, there are some factors y u'll nee to weigh before deciding whether to start collecting benefits early. What will your retirement benefit be? Your Social Security ret rement benefit is bas on the number of years you've been working and the amount you've earned. Your benefit is calculated using a formula that takes into account your 35 highest earnings years. If you earned little or nothing in several of those years (if you left the workforce to raise a family, for instance), i may be to your advantage to work as long as possible, because you'll have the opportunity to replace a year of lower earnings with a higher one, potentially resulting in a higher retirement benefit. Even if you start collecting Social Security benefits at age 62, keep in mind that you still won't be eligible for Medicare until you reach age 65. So unless you're eligible for retir e ealth benefits through your former employer or your spouse's h alth plan at work, you may need to pay for a private health policy until Medicare kicks in.

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If you begin collecting retirement benefits at age 62, each monthly benefit check will be 25% to 30% less than it would be at full retirement age. The exact amount of the reduction will depend on the year you were born. (Conversely, you can get a higher payout by delaying retirement past your full retirement age--the government increases your payout every

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