Waiting for Social Security

According to a recent report, the average 60-something American has about $112,500 saved for retirement. While that’s not bad, it should be higher.

If you’re headed toward retirement without much of a nest egg to lean on, you could find yourself depending more heavily on Social Security benefits to help you out. If so, it may be wise to wait as long as possible to start taking those payments.

Delaying Social Security Payments

As you know, the longer you wait to start taking Social Security, the more monthly income you’ll receive. While you can begin taking benefits at 62, that’s not the full retirement age (FRA) and you’ll get the least possible amount each month. If you wait until FRA (66 or 67 depending on when you were born) you’re eligible for more benefits each month.

For every year you wait after FRA, your benefits increase by eight percent. You can delay taking payments until 70. If you wait past 67 and start taking benefits at 70, your payments will be 24 percent more than they would’ve been at 67. That can really add up. If you can keep working during that time you could increase your savings even more. 

Thinking Longer Term

It’s not an easy decision to take Social Security benefits. It’s also not an easy decision to keep working past 65. However, try thinking of the big picture. Retirement may be longer than you think and you want to make it as comfortable as possible. 

Do One Thing: Use a retirement calculator to get a better idea about how much money you’ll need during retirement.