The optimum time to retire and start receiving Social Security payments is one of the most significant issues that an American worker will have after turning sixty-two.
Everybody has a different solution that suits their circumstances, even though the economic answer is obvious in terms of immediate benefit.
There are four basic ages at which a worker usually decides to retire, but many people make the error of retiring at a time that works for them without really considering the age they have chosen.
The pros and cons of collecting Social Security at every age
You have to figure out how many years of work you have done before you can even think about getting benefits. It is essential to have worked for at least 35 years since the Social Security Administration takes into account a worker’s highest 35 years of earnings when determining payments. If not, the computation will contain zeros, and the sum will drop dramatically.
You can start saving for retirement at age 62, the earliest you can start receiving Social Security payments, if you have these 35 years. One minor warning: if you start receiving benefits at this age, you will never be able to make up the 30% of your benefit that you would lose when you reach full retirement age.
Even though this seems like a horrible deal, people with health conditions or short life expectancies might benefit from it since it might be worth delaying the loss of benefits in exchange for remuneration and a break from work.
Sixty-five is another traditional retirement age. Prior to being raised after Social Security collapsed in the 1980s, it was the original retirement age. It is still the age at which an individual is eligible for Medicare.
Given the lower income loss (you would receive 86.7% of your benefit at full retirement age) and the availability of subsidized healthcare, this may be a favorable moment for people with higher healthcare bills to retire.
For people born in 1960 or after, 67 is the second most popular retiring age. The majority of workers think that this is a good age to retire since you have enough years to enjoy life and are in good health. If you retire at this age, you will collect all of your benefits.
Of course, there is a third option—delaying benefit payments until one is 70 years old—that not many people know about and that most low-income workers cannot afford unless they have no other alternative.
To get the maximum Social Security payment, you must never start receiving benefits, but you can stop working when you reach full retirement age without compromising this option.
The reason for this is that for every year you postpone retiring until you are 70 years old, the Social Security Administration raises your retirement benefits by 8%. As a result, your monthly Social Security payments might reach 124% of your retirement income.
Since Social Security is frequently insufficient to cover basic needs, many people choose not to take advantage of this option, even if they continue to work, in order to enhance their payments and improve their quality of life.
It makes sense that many people cannot afford to wait so long to receive their benefits, as the average payment in the US for those who retire at age 70 is $1,963.48.
In any event, a worker may retire at any point between the ages of 62 and 70, and the percentage of benefits they will receive will change based on the worker’s precise age. For your information, the following are all the percentages a worker may receive:
Age-related percentage of retirement benefits
Sixty-two percent
63 75%
64 80%
65.7%
66 93.3%
67 percent
68 108%
69 116%
70 124%
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.