When Should You Claim Social Security Benefits

(KMDL-FM) The Great American Safety Net- I guess that's what our government was thinking when they established Social Security in August of 1935. The country was recovering from the Great Depression, and financial uncertainty was a major concern for all Americans.

Most of us think of Social Security as our "Retirement Plan". And while the benefits will come in handy in our golden years, there is actually a worst age to start claiming your benefits.

How Can There Be a Best Age or a Worst Age to Retire?

To understand how there can be a "worst age" and a "best age," you need to understand how Social Security works. The program is funded through payroll taxes that come out of your paycheck.

You are eligible to receive Social Security benefits at age 62, but that will come with a cost. If you choose to accept those benefits at that time, you could see your monthly benefit reduced by as much as 30% compared to the benefit you would receive had you waited until Full Retirement Age.

How Is Your Full Retirement Age Determined By Social Security?

The term Full Retirement Age is one that you should get familiar with. No, it's not 65. At least it's not 65 for everybody. Here is when Full Retirement Age arrives for you:

** People born in 1943-1954 – Age 66
** People born in 1955 – 66 years and 2 months
** People born in 1956 – 66 years and 4 months
** People born in 1957 – 66 years and 7 months
** People born in 1958 – 66 years and 8 months
** People born in 1959 – 66 years and 10 months
** People born in 1960 – and later - 67 years

Now, if you choose to retire after your Full Retirement Age, you could see an increase in benefits of 8% or so for every year after the FRA that you continue working. So, if you feel up to it and you love doing what you're doing, you might as well keep at it.

According to financial experts, the worst time for you to begin taking Social Security Benefits is age 62. That's the earliest you can claim benefits via SSA, and a study on the financial site The Motley Fool found that 92% of individuals who took benefits at age 62 would have been better off waiting until at least age 65.

Why Is Waiting to Retire at 65 a Better Option than Retiring at 62?

Elderly couple looking at bills and phone — Photo by Vitaly Gariev on Unsplash

Another reason to wait until age 65 is Medicare, which won't kick in until that time. So, if you "retire" at 62, then you're going to be paying for private insurance out of your pocket for three years before Medicare kicks in.

The Motley Fool study also suggested that more than half of all retirees would have more money via Social Security each month if they waited to retire at age 70. The numbers for increased wealth for retiring before age 64 are not nearly as palatable to most people's budgets.

Sound Financial Advice is the Key to a Happy and Prosperous Retirement

Please note, we are not financial advisors. We are simply presenting information that you might use to begin a conversation with your trusted financial advisory team. But looking into the numbers now and understanding how Social Security benefits work will certainly pay off for you in the long run.

And since you've been around the block a time or two, how many of these places do you remember in the "before" picture?

Lafayette Then and Now - A Look at Familiar Places Almost 20 Years Apart

One of the great advantages of the tech boom across the world has got to be the digital record-keeping that services like Google Maps and Bing provide. Their snapshots of cities, towns, and the countryside over time give us an excellent time capsule of what once was as compared to now. Here are 9 Familiar Places you will recognize today in Lafayette, Louisiana, but do you remember them as they were 10, 15, or even 20 years ago?