Confused about the pros and cons of taking Social Security benefits at different ages? You are not alone. A new study from the General Accounting Office (GAO) found few people understand how much their benefit will be or the financial impact of taking benefits before full retirement age.
And the advice from representatives at the Social Security Administration may be correct but doesn’t give the individual enough information to understand their choices and the financial impact of when they choose to start receiving Social Security.
Understanding the financial impact of when you start benefits is important as more than half of people over age 75 count on Social Security for their primary income, according to government estimates.
Here are some tools that can help you understand Social Security benefits:
- A new fact sheet from Social Security that is designed to help people understand the difference in benefit payments at different ages. Consumers should also look at the Social Security
- Social Security Administration mails Statements to workers attaining ages 25, 30, 35, 40, 45, 50, 55, 60 and older three months prior to their birthday if they don’t receive Social Security benefits and don’t have a my Social Security account.
- Check out estimated Social Security benefits anytime by setting up an online account.
The GAO study recommends that SSA claims specialists provide workers with more information when they call including:
- The amount of the benefit at various ages so they understand the potential benefits of delaying until full retirement age or even age 70.
- Explain the earnings test and how benefits are calculated
- Explain spousal benefits
- Explain how longevity and life expectancy can impact the decision of when to start benefits.
If you work with a financial advisor the strategy of when to begin Social Security benefits should be an integral part of your retirement plan.
While not everyone can wait to begin benefits, it is important to understand what even waiting a year can do to the amount you receive for your lifetime.