How to Claim Your Social Security Benefits at an Earlier Age
According to the Social Security, one must be of age 70 before he or she is entitled to claiming their social security retirement benefits. According to financial experts, this is where you can get your maximum benefits.
What’s more? Your benefits get an increase every year that you withhold from collecting your benefits. And yet, waiting until you’re in the 70s seems like a daunting task to do. Here’s what you can do according to financial experts.
The Best Sector to Delay Claiming Benefits
According to Financial Engines chief investment officer, Christopher Jones, most married couples and high-wage earners must wait for as long as possible before making their claims.
There are two reasons for this recommendation according to him. One, most Social Security payments are made based on their mortality tables. According to Jones, the tables have not been updated since the year 1983. And life expectancies since then have increased over the time.
Jones added that since most people tend to live longer nowadays, the credits you accumulate for delaying your Social Security claim benefits will double or triple. Another reason is that Social Security still adapts the low-interest rate environment.
This means that every year you delay claiming your benefits, your money increases from 6-8%, guaranteeing a high return on investment. Thus, Jones recommends holding off the claim for most married couples or high-wage earner to avail of these incredible benefits. However, this may not be the case for the low-wage earners.
For Low-income Earners
Meanwhile, Jones says that low-income earners don’t need to wait until the 70s to claim their benefits in full. According to him, they can generally claim their benefits at the age 66-67 years old.
This is because their high-income earner spouse can hold their benefits until the age of 70s. Meanwhile, the single people will have two options in claiming their benefits. Either they can wait it out until 70, or they can avail of the next best option: to withdraw earlier.
The Alternative Best Age to Claim Benefits
Jones says claiming your benefits a year earlier may cost you a few thousand dollars, but the benefits you can get from claiming earlier may outweigh your cost.
According to JS Consulting’s managing director Jason Scott, you need to be asking yourself on how long you expect to live to determine whether or not you need to claim your benefits already. If you’re still employed and functioning well, you may be healthier than average and you can hold out your claim.
But if you’re already frail and are suffering from a health condition, or if you just want to live your life to the fullest and pursue your passions and hobby the moment you retire, then it’s best to start claiming your benefits sooner.
Aside from your life expectancy, you should also look into your health, income, and employment history. According to Scott, individuals who live a healthy lifestyle, who are still employed and have multiple savings and investments tend to live longer and support themselves even after retirement.
Individuals who fall into bad health habits like drinking, smoking, and have a family history of diseases, on the other hand, have the opposite effect.
Jones adds an individual can consult a financial advisor to evaluate his different options and how these options can impact their claiming benefits. Alternatively, they can also install the Social Security software. He also warns people to adjust their cost-of-living first when doing their benefit check to determine if their expenses will remain the same for the rest of their lives.
This is to determine the right time to file a claim without committing a huge mistake. According to Jones, you can only withdraw your application once, not to mention you may have to repay all the funds you’ve received so far. So he encourages individuals to think things through before deciding.
More in Pocket Change
Can You Save Money by Increasing Your Insurance Deductible?
Increasing your insurance deductible will save you some money on insurance premiums but, the money you save may not be substantial...March 1, 2019
Want to Save More Money While Living a Languish Life? Move into these Affordable Countries!
Most Americans tend to quit their corporate job in their home country, despite the big salaries they have. The reason? It’s...March 1, 2019
Remortgaging May Be The Best or Worst Decision You’ll Make
With the continuous rise and fall of the mortgage rates in the market today, more and more people are taking the...March 1, 2019
Things You Didn’t Know Your Car Insurance Could Cover
When you hear about surprising things that can come from car insurance, it’s usually something like rate increases and mishandled claims....March 1, 2019
Financial Setbacks Rock Social Media Giants Twitter, Facebook and Snap Last Week, but Can They Make a Turnaround?
Stocks in the social media fraternity received a major pounding last week after executives from social media giants like Twitter and...March 1, 2019
With the Rise of Robo-Advisors, What is the Financial Advisory Industry’s Future?
In this modern world where technologies continue to evolve, new state-of-the-art robot-advisors like Betterment and WealthManagement have emerged that threatened to...March 1, 2019
Struggling to Find Your Ideal Career Path? These Tips Will Help You Sort It Out
One of the most common trends we see with millennials today is that they all seemed to be quitting their jobs...March 1, 2019
Fans Wait with Bated Breath as Apple Unveils 3 New iPhones
iPhone enthusiasts are now abuzz on social media after being brought to life with last week’s grand announcement that the company...March 1, 2019
How to Get The Best Price On Auto Insurance After Making Online Comparisons?
It is a fact that using online methods can get you good auto insurance prices. When you begin your search online...March 1, 2019