retirement

Collect Social Security before you die?

Don TaylorQuestionDear Dr. Don,
Is it better to retire at 62 and start collecting some of the Social Security you have paid in? My way of thinking is: Don't wait until maximum retirement age to collect because you might not live that long. So why not get some of it as soon as possible? Right or wrong?
-- Steve Startup

AnswerDear Steve,
They call it personal finance because the advice has to fit the person. What's right for you may not be right for me. The Social Security Web page "When To Start Receiving Retirement Benefits," will help you work through some of the decisions you need to make concerning your Social Security retirement benefits.

My current thinking is that I want to wait until age 70 to draw Social Security retirement benefits because I want to maximize the retirement benefit that will be indexed to inflation over time. An inflation index on an annuity contract is very expensive. The government's inflation index for Social Security benefits is free.

If I decide to retire before my full retirement age of 66½, I'm willing to spend some of my retirement savings upfront to let me delay receiving Social Security benefits before age 70. If I started receiving benefits at age 62 they would be 72.5 percent of my full retirement benefit. If I wait until age 70 to start benefits I'll get 128 percent of my full retirement benefit. I'm more concerned about my retirement income and my spouse's retirement income in our 80s and 90s than I am about maximizing my total Social Security payments should I die in my 70s.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

To ask a question of Dr. Don, go to the "Ask the Experts" page and select one of these topics: "Financing a home," "Saving & Investing" or "Money." Read more Dr. Don columns for additional personal finance advice.
 

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

News alert Create a news alert for "retirement"

advertisement

Show Bankrate's community sharing policy
          Connect with us
advertisement
CD & INVESTING NEWSLETTER

Learn the latest trends that will help grow your portfolio, plus tips on investing strategies. Delivered weekly.

Blog

Jennie Phipps

How super-sized should IRAs be?

A new report by the Government Accounting Office urges Congress and the IRS to crack down on over-sized IRAs.  ... Read more

advertisement
Partner Center
advertisement

Connect with us