Gary Alt, co-founder and financial advisor at Monterey Private Wealth in Pleasanton, CA recently had an article published by Nasdaq. You can read the article at Nasdaq.com by clicking here, or read it below.
Deciding when to start collecting Social Security benefits is one of the biggest financial decisions you’ll make in retirement. Why? The lifetime cost of making the wrong choice can be enormous, and could have a huge impact on your family’s retirement lifestyle. Considering that you’ve contributed a hefty amount over many years of your career, make sure you’re not shortchanging yourself or your family.
Consider a hypothetical example: Bob turns 62 this year and is wondering whether he should begin collecting benefits. If he waits until his full retirement age of 66, he’ll get $24,000 per year. Taking early benefits at age 62 cuts his payments by 25%, so Bob will get only $18,000 a year.
If he waits until age 70, his full retirement benefit amount increases 8% a year, rising to $32,652. By age 85, those payments will add up to about $608,600, compared with only about $547,600 if he started collecting at age 62, assuming 2% percent annual cost of living adjustments.
While there are a lot of factors that go into the decision on when to start taking benefits, a few of them are critical in making the right choice....