No doubt, saving as much as possible for your future is vital. Social Security payments are not meant to be your main source of income in retirement. However, it is advisable to know how to maximize your future benefits so that you can make the most of them once you apply. The Administration reminded citizens on its social media about the importance of using their online “Plan for Retirement Tool“.
If you make use of your “Plan for Retirement Tool“, you will be able to compare your retirement benefit estimates, which are based on various ages. The easiest way to make use of this tool is to sign in to your my Social Security account. It is time to create a personal online account if you have not done so yet. For your information, filing at the age of 62 is possible.
Social Security retirement plan
Many American workers wish to apply for retirement benefits at the age of 62. Some of them do so without even checking the amount they will receive from the Social Security Administration each month.
Unfortunately, some early filers regret having filed so early because they did not take into account inflation and the continuous loss of purchasing power due to soaring prices. This loss of buying power takes place even if Social Security increases benefits using COLAs.
What is more, it is important to highlight that there are both advantages and disadvantages. On the one hand, you will receive more payments if you file as early as 62.
On the other hand, you will get a 30% reduction, which can shrink your retirement benefits, and many retirees cannot afford it. Remember that inflation reduces your buying power and affects your financial stability.
How to get a Social Security estimate
Whether you file at 62 or at 70 (the age when you can get 24% per month), it is possible to get an estimate online. All you have to do is sign in on this official website to get payment amounts at ages 62-70: https://www.ssa.gov/prepare/plan-retirement.
Once you check your estimate, you will have additional information to make the best choice. Filing for Social Security must be done when you think it suits you best.
To make this important decision, you should also know that filing at Full Retirement Age allows you to receive 100% of your benefits in retirement. Some people may want to work and get benefits simultaneously, however, this could reduce your benefits if you exceed the limits and are under full retirement age.
Another free tool you could use if you are working and receiving Social Security, is the earnings test calculator. This will be the best way to see how your earnings could affect your benefit payments in retirement. Check it at: https://www.ssa.gov/OACT/COLA/RTeffect.html
