Magic Age To Begin Social Security Benefits Is???

August 9, 2023

2 minute read: Knowing how to ‘win’ in the Social Security distribution game can save you thousands. You might be surprised to hear what age is the best age for his.

Why is knowing the break-even age important when it comes to deciding when to start taking your Social Security? First, here is why it is important to the claimant alone. Wade Pfau, the retirement expert shares with us, if a male makes it to age 65, their life expectancy is 86 years old. If a woman makes it to age 65, her life expectancy is age 89.

If a married couple makes it to age 65, there is a 50 percent chance that one of them will live until age 95. This is not life expectancy from birth. This is if they make it to age 65. Here’s an example of the cost to that person if their full retirement age is age 67 and they take their benefit in age 62. Their full retirement benefit was $2,000 per month. Their reduced benefit at age 62 is $1,400 per month. If they live until age 86 and are male, taking the benefit early cost them $43,200.

That is $7,200 per year past the break-even age. It is way worse if you would have deferred until age 70. Your Social Security benefit would have increased to $2,480 per month. The lost benefit would now be $77,600. All of this gets worse the longer you live. For a woman, there is more loss. Using full retirement age 67, if a woman lives to age 89, she loses $64,800 taking the benefit at age 62. If she would have deferred until age 70, she loses $116,640 if she lives to age 89. That is a lot of money. If you are married, you should consider deferring until age 70 to increase the benefit to the surviving spouse.

You may be a business owner. Or, someone who’s see’s the end of their working life coming to it’s conclusion. Now’s that time to zero in on understanding what Social Security is promising thru an ageless formula. Especially if you are now in the ‘red zone’ of life (50 years or older).

Finally, you should consider deferring until full retirement age regardless of whether you live to the break-even age or not if the goal is to maximize guaranteed retirement income.

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