Figuring out your personal social security retirement benefits and when to begin accepting them depends on a large number of factors. There are any number of questions to ask yourself, such as how long you expect to live, how much you need to live on, and whether there are other avenues of income, such as a pension, that will be added to the mix.
The primary decision to consider about the Social Security program is determining at what age you plan to retire. Benefit schedules that can be claimed begin at age 62, then again at 66 and at age 70. Under these schedules, you can count on your monthly payments being about 76 percent higher if you can wait to claim them at age 70 as compared with the amount you would get at 62. Waiting to 66 will bring in 44 percent more per month.
In figuring which is your best bet, many advisers may tell you to wait as long as you can before making your claim in order to get the highest payment. Others, though, say you should take the money as soon as you can. Waiting is akin to betting on how long you expect to live, since putting off collecting to 70 means you will need to live until 90 or beyond to get the same amount in payments as if you had retired at 62, even with the higher monthly check. Instead, they say, in the words of the Steve Miller Band, Go on, take the money and run.
Deciding when to begin taking Social Security also can be affected by other potential retirement payments. These can include private company pensions, reverse mortgages, income from a spouse, and even death benefit payments from a deceased spouse, which all can help put off claiming Social Security. Contact the employer holding your pension to get a full description of its benefits and when they may be claimed, add up the other payments, and consider any tax liabilities before making the leap into full retirement.
If you plan to collect Social Security and continue to work, you will only be allowed to earn a certain amount per year before the program will start withholding $1 for every $2 or $3 you earn, depending on your age. After your full retirement birthday, though, these earnings restrictions will be removed, so you can earn all you like. In addition, you will begin getting back some of the money held back by the restrictions in a higher monthly payment.