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Social Security: When to Collect It

Available through CUSO Financial Services, L.P.

So, you’re approaching retirement… you can picture yourself on that next adventure, spending quality time with your significant other or getting around to the traveling you’ve been postponing for years. But before you punch out for the final time, there’s one more thing you’ll need to plan for—collecting Social Security.

Social Security is a retirement benefit income that replaces a percentage of your pre-retirement income based on your lifetime earnings. The Social Security benefits program is a collective pool of funds. The money you pay into it isn’t stored away for you when you reach retirement. Instead, it’s paid out to retired individuals who are getting benefits now. Then any unused money goes into a Social Security trust fund to eventually pay you when you begin receiving retirement benefits.

Choosing when to start receiving your Social Security retirement benefits could be one of the most important financial decisions you make. Your disbursement age will play a crucial role in your monthly retirement benefit. Here are the three age options for claiming Social Security retirement benefits:

  • Full Retirement Age—This is the age when you can start receiving your full retirement benefit amount. The full retirement age has increased from 66 to 67 for anyone born in 1960 or later.  To view the full retirement age chart, click here.
  • Early Retirement Age—You can claim Social Security retirement benefits as early as 62; however, it’ll reduce the amount of your benefit. Click here to learn how claiming retirement benefits early will affect your benefit amount.
  • Delayed Retirement Age—When you delay benefits, the amount of your retirement benefit will increase up until age 70.

Other Retirement Benefit Factors

In addition to deciding what age to begin receiving your retirement benefits, there are other factors you should consider before making your decision.

  • Continuing to Work—If you choose the delayed retirement age option above, you can increase your future Social Security benefits. Each extra year you work adds another year of earnings to your record, which means higher benefits when you choose to receive them.
  • Specific Types of Earnings—While Social Security earnings are calculated the same for most workers, some types of earnings have additional rules. You can view a complete list of these earning types with special regulations here.
  • Pensions and Other Factors—Pensions and taxes could potentially impact your retirement benefit. Click here to review different resources from the Social Security Administration.
  • Minimum Years Worked—You earn Social Security credits when you work and pay Social Security Taxes. To qualify for Social Security benefits, you must earn at least 40 Social Security credits. It’s important to note that the number of credits does not affect the amount of benefits you receive. It only determines if you are eligible to receive them or not.

Deciding when to start taking your Social Security benefits isn’t something you have to figure out on your own. Monaye Nelson-Morgan, CFS* Financial Advisor, can be your guide through the home stretch. Having an Advisor can help keep you on track to make sound financial decisions about when to retire and the kind of retirement lifestyle you envision for yourself. Contact Monaye today at mmorgan@cusonet.com. Or visit our website to learn more.

*Non-deposit investment products and services are offered through CUSO Financial Services, L.P. (“CFS”), a registered broker-dealer (Member FINRA/SIPC) and SEC Registered Investment Advisor. Products offered through CFS: are not NCUA/NCUSIF or otherwise federally insured, are not guarantees or obligations of the credit union, and may involve investment risk, including possible loss of principal. Investment Representatives are registered through CFS. The Credit Union has contracted with CFS to make non-deposit investment products and services available to credit union members.

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