Delaying Retirement Is Absolutely Worth It For These 6 Benefits
Waiting to claim Social Security benefits can make your monthly checks higher because you won't be subject to early filing penalties for retiring prior to full retirement age (FRA). You can also earn delayed retirement credits between full retirement age and age 70, which boost your monthly retirement benefit.
If you start receiving benefits at age 66 you get 100 percent of your monthly benefit. If you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase.
A retirement plan has lots of benefits for you, your business and your employees. Retirement plans allow you to invest now for financial security when you and your employees retire. As a bonus, you and your employees get significant tax advantages and other incentives.
When asked when they plan to retire, most people say between 65 and 67. But according to a Gallup survey the average age that people actually retire is 61.
By the time some workers reach their 50s and early 60s, they're starting to feel burned out, so retiring before the traditional age of 65 can feel invigorating. Men retire at an average age of 64, while for women, the average retirement age is 62.
A 2016 report from Stanford University shows that 17% of Americans between 70 and 74 were still working at least 10 hours weekly in 2012, up from about 12% from 2000. The reason: Workers with a higher educational attainment and higher incomes are staying in the workforce longer.
You'll snag a higher Social Security benefit
In fact, if you're entitled to $1,500 a month at a full retirement age of 67, delaying your filing until age 70 will boost that number by 24%, leaving you with $1,860 a month on a permanent basis.
The typical advice is that you should aim to replace 70% to 90% of your annual pre-retirement income through savings and Social Security. For example, a retiree who earns an average of $63,000 per year before retirement should expect to need $44,000 to $57,000 per year in retirement.
Monthly Social Security payments are reduced if you sign up at age 63, but by less than if you claim payments at age 62. A worker eligible for $1,000 monthly at age 66 would get $800 per month at age 63, a 20% pay cut. If your full retirement age is 67, you will get 25% less by signing up at age 63.
Age 63: 25 percent. Age 64: 20 percent. Age 65: 13.3 percent. Age 66: 6.7 percent.
A surviving spouse can collect 100 percent of the late spouse's benefit if the survivor has reached full retirement age, but the amount will be lower if the deceased spouse claimed benefits before he or she reached full retirement age.
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