The net result would be to extend the life (and thus the value) of your cumulative benefits. If youre planning to work between the ages of 62 and 66, for instance, the scale tips in favor of deferment, as wages above a certain threshold will erode your Social Security benefits until you reach full retirement. The rationale is the same: By that point (see B in the chart), your cumulative benefits from waiting will add up to 206,000 compared to 204,000 had you elected to receive benefits at 66 and 189,000 had you begun drawing from the system at 62 - this is assuming a primary insurance amount of 1,000. The question, in turn, is whether (and, more specifically, when) the cost of waiting outweighs the benefit of a higher but delayed monthly check.Īnd while there are calculators for this purpose online, heres the gist of it: If you expect to live past 77, then you should consider waiting until full retirement age to begin collecting benefits, as this is the point when the gain from waiting overtakes the cumulative cost - see point A in the above chart. This is because theres a large cost associated with waiting: If you start receiving benefits at 62 as opposed to 70, then you get monthly checks for eight more years. The net result is that you could end up receiving 24 to 32 more each month than your primary insurance amount (what youre entitled to at your full retirement age) and 76 more than youd get by taking benefits at age 62.
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