The Social Security Administration recently made social security statements available online for the first time. One of the biggest new benefits to having statements ready online is a color bar chart that displays the estimated amount of retirement benefit in each check you would receive if you were to begin taking social security at age 62 or if you wait for the full retirement age of 70.
While the new statement does highlight how much of a reduction in benefits occurs if you take retirement before age 70, it also shows that you may be able to retire earlier than you thought.
The amount of money you receive in your social security check depends on a number of factors, with the most significant of factors being the time at which you decide to begin distributions. The amount of money you receive in each check could vary by as much as $800 if you decide to begin at 62 versus age 70. Full retirement age is roughly 65-67 depending on how many years you worked and contributed to the system.
Often overlooked, if you begin taking social security at age 62, you lock yourself into that payment amount, notwithstanding COLA increases, which you are always entitled to. For those who claim social security at 62, your benefit will roughly be 30% lower than if you wait until full retirement age.
Many believe that the amount they receive in Social Security simply increases as they get older, but the amount you receive over time is more or less the same — the discernable difference being how much more is in each check the longer you wait to retire.
The redesigned statement makes this difference much easier to understand and the simple colored graph removes any discrepancies between the three different possible stages of taking retirement.
What’s more, the new design also includes fact sheets that are specific with other information that might have been overlooked in other versions. For example, it clarifies that you need to have worked for at least 10 years in order to qualify for benefits and that if you have fewer than 35 years of earnings, the years you do not work count as zero and may end up reducing your total benefit amount.
If the benefit amount you see on your estimated pages seems enough for you to retire on, it could be possible to choose to do so as early as 62.
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