Timing Retirement & Social Security Benefits

Social Security benefits could be a key component of your retirement strategy. You may want to consider how your claiming age could affect the size of your benefit.

Age 62 — You will receive a benefit that is permanently reduced by 25% to 30% (depending on birth year), and your benefit may be further reduced if you continue to work.

Full retirement age (66 to 67, depending on birth year) —You will receive your full benefit (Primary Insurance Amount), and any earnings from working will not affect your benefits.

Age 70 — For each year you delay filing after reaching full retirement age, your benefit will increase by 8%. At age 70, you would receive your maximum benefit.

Note: If you’re married, your claiming age could affect your spouse’s Social Security survivor benefits.

Social Security Expectations

It is generally wise not to place too much emphasis on Social Security in your retirement planning. The income you might receive is intended to supplement retirement savings, not to replace it. And Social Security faces serious fiscal challenges. The most recent trustees’ report indicates that Social Security should be able to pay current benefits until 2034. After that, the program might be able to pay about 78% of scheduled benefits, unless Congress takes action.
To estimate your monthly Social Security benefit, go to socialsecurity.gov/estimator/.

Retiring Early, Late, or Somewhere In-Between?

Retiring early could be a rewarding experience, but it typically requires a more aggressive saving and investment strategy to accrue sufficient assets in a shorter period of time. Don’t forget that the earlier you retire, the longer your retirement savings may need to last. Retiring later could give you a longer period of time to build your assets. But even if you are able and willing to work longer, you might be in a stronger position if you use an earlier target date for planning purposes.