Social Security Claiming Options to Maximize Income

What is the best age to take Social Security early at age 62 or at 66 to 67 depending on your birth year or the max delayed at age 7. You get almost 8% annual increase in the income amount by the way with this choice. Picture in this video shows a chart from the Social Security Administration that tells you what your birth year and what your full retirement or normal retirement age will be. Someone who was born in 1955 result today so her normal retirement age is 60 in 2 months looking this example Sally if she takes her full retirement benefits which will be calling be she’ll be 66 years old in 2 months that represent $1,790 per month. If she takes it early she would receive $1335 per month and we have a difference column in the right hand side to figure out the break-even point. Look at it in chart form as you can see the red line is early , yellow line is normal, and purple line is her break even which happens to be age 78 for Sally. If she knew that she would live past age 78 it’s better to take the normal retirement yellow line $1790 per month as it crosses over the red at age 78. So she’ll make more on a monthly basis from 78 on also on an accumulative.

How does that compare to early versus a delayed? Sally would have to wait an extra long time for that which would be almost 8 years; so instead of receiving $1,335 per month at age 62 so at age 70 she would receive $2,339 per month almost a $1,000 per month difference. How does it translate to her break even? Red line is age 62 and blue line is the normal retirement age for Sally. The purple line is a break-even so instead of being a 78 it has pushed back to age 81 but as you can see this the slope is steeper with the blue line because she would represent the $1,000 per payment per month more than the red light. If Sally lives past age 81 her benefits will skyrocket. Lets take a look at what that actually would be in the chart form. Chart represents both claiming early and delayed social security claims. If she passes away at age 81 she were only receive about a $5,000 cumulative benefit by delaying, now mind you she had to wait eight years in beginning but the monthly benefits for $1,000 more per month in the delayed and they can easily catch up age 81 which is the breakeven point. What if Sally lived to age 91?

Claiming early to receive those benefits from 62 to 91 which would total $463,245 versus delaying claiming social security at age 70 for a cumulative benefits of $600,000. She has about $125,000 in extra benefits by delaying claiming social security benefits and passing away at age 91. If your married it might be to your advantage to delay taking social security as if one spouse passes away the surviving spouse would receive the higher social security benefit amount.