• Home
• Contact Us

• Account Login
• Our Services
• Professional Team
• Tips and News
• Firm Memberships

Home » Tips and News »

Surprise! You're Too Young to Retire

In a recent survey, 80% of American workers either incorrectly guessed or didn't know their eligibility age for full Social Security retirement benefits. Do you know yours?

Thanks to legislation passed in 1983, those born after 1960 won't be eligible to receive full Social Security benefits until age 67. Those born before 1960 can begin to receive full benefits somewhere between the ages of 65 and 67, depending on their birth year. If this information is new to you, it may be time to take a fresh look at your retirement savings strategy and Social Security distribution plans.

Determining the right strategy for drawing on Social Security requires careful planning and a healthy dose of number crunching - taking into account your individual life expectancy, your "full retirement age" (as defined by the Social Security Administration), the anticipated value of your assets at the time of retirement and what type of return you can expect from your portfolio. As you review your options, you may want to keep the following considerations in mind.

• If you want to retire early, you can begin to receive Social Security benefits at age 62, but doing so will reduce your monthly benefit by as much as 30%. You can also delay taking benefit payments until age 70 if you want to receive a larger benefit later in life. For example, a person who could expect to receive $1,000 a month from Social Security at full retirement age (66) could choose to (a) begin taking benefit payments at age 62 and receive a reduced benefit of $750 a month, (b) begin taking benefit payments at age 66 and receive $1,000 a month or (c) begin taking benefit payments at age 70 and receive an increased benefit of $1,320 a month.
• All Social Security distribution options are designed to provide you with roughly the same amount in overall benefits, so choosing the best option for you means analyzing your unique needs and financial situation.
• Your full retirement age depends on your birth year. For help in determining the year in which you can begin to receive full Social Security retirement benefits, visit the Social Security Administration's Web site at www.ssa.gov/retirement.
• Delaying Social Security benefit payments means you will have to rely on your savings to fund the early years of your retirement. This could shrink your portfolio and reduce the returns you can expect in later years. On the other hand, if you claim benefits early and unexpectedly outlast your savings, you may end up living on a reduced Social Security benefit for the rest of your life.
• If you plan to continue working, you no longer need to wait until age 70 to receive full Social Security benefits. You can begin receiving benefits as soon as you reach your full retirement age.

Although many of the laws governing Social Security distributions were enacted 20 years ago, they remain a mystery to most retirement-minded investors. Whatever your retirement plans entail, you may want to be sure they take into account all facets of the prevailing legislation.

Securities Offered through Linsco/Private Ledger Member NASD/SIPC