Deciding when to collect Social Security is a key part of planning for retirement. Learn how waiting to collect Social Security benefits could significantly increase your retirement income.
As you plan and prepare for retirement, one of the key things you have to decide is when to start collecting Social Security. Seems simple enough, but this decision actually requires careful consideration because it may impact how much you’ll receive throughout your retirement years. If you start collecting before age 70, your Social Security retirement benefits may be reduced. On the flip side, if you wait to collect, your monthly payments could be larger, which means you may have more money for expenses and the activities you enjoy. In any case, remember Social Security provides benefits for your life and may help reduce some of the risk of out-living your savings. As the probability of living a long life has increased, make sure you consider the impact of living more than 30 years in retirement.
Here’s what you need to know to make a more informed decision.
Based on this information, you might decide to keep working until you reach your full benefit age. Or you might consider adjusting your investment strategy to help generate more income if you want to retire sooner.
Age Start Receiving Benefits
Social Security Payment
70 or later
Full Retirement Age
Benefit Rate at Age 62
Social Security Payment at Age 62
For illustrative purposes only.
Of course, there’s nothing inherently wrong with starting early, especially if it’s out of necessity. In particular, if you're in poor health, it may not make sense to delay Social Security because you may not live long enough to reap the benefits of a later, higher lifetime payment. You just need to be aware of the ramifications and factor the reduced amount into your retirement planning.
Besides looking at the different payment amounts, you’ll also want to take your personal situation into account. Waiting to collect Social Security may or may not make sense depending on your finances, pension benefits, health, ability to work, and any spousal benefits. Social Security is an important safety net to meet some of your primary needs and expenses in retirement. Treat the decision thoughtfully and with care. The goal is to pick the time frame that will best help you meet your needs, wants, and wishes in retirement.
For additional support, visit the Social Security Administration website, ssa.gov, or schedule a meeting with a TD Ameritrade Financial Consultant who can help you create a retirement income plan for the future you envision.
TD Ameritrade provides tools, resources, and knowledgeable specialists, all to help you find the retirement income solution that may fit your unique needs.
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