Maxing Out your Social Security Retirement Benefits

Many seniors at the age of 62 wonder whether it is better to retire earlier, to wait for the full retirement age or simply delay benefits after that age.

While some experts recommend people to move ahead rather than wait, there are some facts you should consider before deciding to delay benefits. For instance, you should know that at the age of 62 you’ll be entitled to only three-quarters of the monthly benefit because you applied for it 48 months earlier.

If you’re 65 years old and want to retire, you should be aware that you’ll cash in just 93.3 percent of the monthly benefit because you have 12 months to go before reaching the full retirement age.

At 66, you’ll get 100 percent of your long-awaited benefits, but if you wait up to four more years you could see those benefits rise significantly.

For example, if you retire at 67 you’ll receive 108 percent of the Social Security benefit because you were patient and delayed the benefits for 1 year. But if you apply for Social Security retirement benefits at the age of 70, expect to see you monthly benefit jump to 132 percent.

Experts explained that a benefit rises by 8 percent for each 12 months you delayed the withdrawal, or two-thirds of 1 percent for each month you delayed collecting benefits. You can earn instead delayed retirement credits until you hit age 70. Let’s say that your monthly benefit at age 66 is $1,500. If you wait age 66 to cash it in you’ll get $1,740 per month instead.

Another thorny topic is related to seniors that reached retirement age but they are also employees. The question is whether they could receive retirement benefits and have a job.

According to experts, you can do both but there are some limitations based on how much you are being paid. Nevertheless, after reaching the full retirement age you are entitled to all benefits regardless of the income.

If you haven’t reached 66 last year, and you earn more than $15,720 your retirement benefits will be lowered by $1 for each extra $2 you made. But this penalty doesn’t leave you without your benefit money. At the full retirement age, your benefit rises and you’ll recover that money.

Additionally, if you are not self-employed, all your wages will be considered when calculating earning limits. But if you are self-employed, only the net income will count because you can deduct some expenses.

Interest, capital gains, other Social Security benefits, retirement funds and investment assets are not considered earnings.

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