Many people believe that the date that they should claim Social Security is synonymous with the age when they go into retirement. However, nothing could be further from the truth. The age you retire and the age you claim Social Security does not have to be the same.
Retirement Age versus Claiming Social Security
Your Social Security claiming age date is based on law, and the earliest claiming age for Social Security is 62. As a result, you’ll receive a reduced benefit of 75% of your full retirement benefits if you claim at 62. If you are claiming spousal benefits at the age of 62, you will only receive 50% of the reduced amount of your spouse’s benefits. Although, once you make this decision, you need to remember that it is a permanent commitment unless you make a change within 12 months.
In order to help determine the optimal time to begin claiming your Social Security benefits, it is imperative that you complete a comprehensive financial plan that takes into consideration all of your financial resources, your overall tax picture, your distribution strategy, your longevity, your risk management plan, and your legacy goals. Do not make Social Security decisions in a vacuum.
Furthermore, it’s important to note that what you consider as your “retirement age”, or the age in which you leave the workforce is completely up to you. However, it is also imperative to remember that leaving the workforce early can directly affect your Social Security benefits. Whether you choose to retire early, on time or continue to work after your retirement age is up to you, but it’s crucial that you discuss this plan with a qualified financial advisor.
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Investment advisory services offered through Barber Financial Group, Inc., an SEC Registered Investment Adviser.
The views expressed represent the opinion of Barber Financial Group an SEC Registered Investment Advisor. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Barber Financial Group does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.