When Is The Best Time To Start Claiming Social Security Benefits?

nearmetips Posted: 2020-9-22 04:47:39
Silvur, a retirement app, lets you easily calculate the benefits you'll receive at every age against your expenses and net worth. (Shutterstock)
68430222145592.jpg This post is sponsored and contributed by a Patch Brand Partner. The views expressed in this post are the author's own.

If you're nearing retirement, you've probably wondered when is the best time to start receiving Social Security benefits. Most people who have paid into the system for at least 10 years are eligible to begin collecting Social Security at age 62, but that doesn't necessarily mean you should.

The "best age" to start taking Social Security benefits depends on a number of individual factors. With Silvur, a free app dedicated to helping folks reach their retirement goals, you can easily calculate the Social Security benefits you'll receive at every age and how they compare to your expenses and net worth. Whether you're single, married or divorced, Silvur will help calculate your benefits based on your marital status. In addition, Silvur factors in Medicare cost estimates based on your ZIP code once you hit age 65. You'll get a complete picture of your retirement finances by age.

How Are Social Security Benefits Calculated?
According to Silvur, the Social Security Administration calculates your benefits based on the average of your top 35 earning years. However, earnings over a certain amount are not used to determine your benefits. In 2020, the limit is $137,000, meaning anything you earn over that is not included in the calculation of your Social Security benefits.

If you start taking Social Security before your full retirement age, you'll receive a permanently reduced benefit. For most Americans, full retirement age is between 65 and 67, depending on when you were born.

Waiting until full retirement age to collect benefits is often the best choice, but that may not be right for everyone.

Download Silvur To Calculate Your Social Security Benefits At Any Age

How Are Spousal Social Security Benefits Calculated?  
If you're currently married, divorced or widowed, you may qualify for Social Security spousal benefits. The size of your Social Security spousal benefit depends on your age, your spouse's age, the maximum amount of your spouse's benefit, your marital status and whether other benefits are available to you.

Some retirees need to take a spousal benefit because they did not work long enough to qualify for their own Social Security retirement benefit. However, you can also qualify for your spouse's benefits even if you've qualified for your own. If you and your spouse have both paid into the system, the Social Security Administration will automatically give you both the higher benefit of the two.

According to Silvur, if you're married, you can qualify for spousal benefits if your spouse is already receiving benefits, you've been married for at least one year and you're at least 62 years old or caring for a child who is under age 16 or disabled. The maximum amount you can claim is 50 percent of your spouse's full benefit.

If you're divorced, you can receive Social Security benefits based on your ex-spouse's earnings record if you've been divorced at least two years, you were married for more than 10 years, you never remarried and you are age 62 or older. At full retirement age, you could be entitled to up to 50 percent of your ex-spouse's full benefit.

If your spouse died, you can qualify for survivor benefits if you were married to the deceased person for at least nine months and you are at least 60 years old (unless you are disabled or caring for the deceased person's child, who is under age 16 or disabled). If you're widowed, you're eligible to receive the full amount of your late spouse's benefit once you've reached full retirement age.

How Should You Decide When To Begin Collecting Social Security?
According to Silvur, there are a number of factors to consider as you decide when the right time is to collect benefits. These include:

Health and life expectancy: If you're in poor health and don't expect to live into your 70s or 80s, it might make sense to collect benefits early. If you expect to live another 20 years, delaying benefits may be the better choice.

Whether some else qualifies for your benefits: If you have a spouse or dependent eligible to receive benefits on your Social Security record, you'll need to consider how the timing of when you take benefits will impact them. In some cases, you may want to delay collecting your benefits to maximize the amount your spouse or dependent child can receive.

If you're married and you or your spouse has earned significantly more than the other, consider waiting to collect the higher-earning spouse's benefits. If the lower earner outlives their spouse, he or she will be eligible to collect benefits equal to the higher of two the paychecks.

Other sources of income: If you have savings, CDs, money market accounts, retirement accounts or other investments, you can use those to pay your bills until you reach full retirement age, and you can then collect full benefits.

Whether you're still working: If you haven't reached full retirement age and are healthy enough to continue working, you may want to postpone your retirement until you've reached full retirement age and can collect 100 percent of your benefits. If you wait to collect benefits until after your full retirement age, you'll earn a delayed retirement credit for every month you don't take Social Security until you turn 70, which can increase your benefit by up to 8 percent a year. If you're in your top-earning years, continuing to work may increase the average income used to calculate how much you receive when you do start collecting Social Security.

Break-even point: At a certain point, the larger Social Security payout you'll receive by delaying benefits will offset the income you missed by waiting. Figuring out when this break-even point is may help you decide when to start taking your benefits.

There's no additional benefit for waiting longer than age 70 to receive your benefits. For many people, the break-even point is earlier than this, which is why it's important to calculate when yours is with the help of a financial planner or a retirement app like Silvur.

How Silvur Helps You Plan For Your Financial Future

In addition to calculating your Social Security benefits at any age, Silvur helps you make smart decisions about your financial future based on your retirement score. To get your retirement score, download the iOS app and enter your income, assets and planned retirement date. From there, you'll get a retirement score that shows you how long your money will last into retirement — but it doesn't stop there.

Silvur also provides you with a series of monthly checklists that will help you increase your financial well-being. If you plan to travel, downsize or just want to prepare for the unexpected, Silvur has you covered: You can use the app to set goals and keep track of your savings progress.

Additionally, Silvur helps extend your savings with its Silvur Marketplace, which offers cash back or exclusive discounts on everyday purchases so you can save even more money toward your goals.

Find Our Your Retirement Score With Silvur. Calculate Now

Silvur: 3 Real-Life Social Security Benefits Examples
Silvur: When Should I Take Social Security?
Silvur: Qualifying for Social Security Spousal Benefits
SSA.gov: Retirement Benefits
SSA.gov: When To Start Receiving Retirement Benefits


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