Delaying Retirement and Pensions: How They Affect Social Security
As retirement approaches, many wonder which year is the best to finally leave their careers. Depending on individual circumstances, the year they should consider leaving their company and starting their golden years can greatly vary. For some, waiting around a couple extra years could mean a much bigger check each month for retirement. For others, the benefit could be minimal or nonexistent.
So how do you know when it’s the best time to retire? It comes down to planning and researching ahead of time. The Social Security system provides an increase in a number of benefits for each year a person waits to retire until the age of 70. These benefits are also reduced if a person decides to retire early. This is to encourage people to continue working and paying into the system rather than taking too much money out for too long.
A person that claims benefits between the age of 62 and their full retirement age, which can be 65 to 67 depending on the year of birth, the system is set up to reduce the number of benefits by a fraction of a percent for every month leading to the full retirement age. However, those who choose to work up to the age of 70 will see an increase. For the most part, there are no real benefits to working past 70 in the Social Security system.
There are some cases where retiring earlier is either more logical or unavoidable. For instance, if someone’s basic living expenses are not being met, they may want to retire early. In other cases, a person may have a shorter life span due to a medical condition. When the person does not foresee living past the age of 75, it makes little sense to continue to work.
Your earnings record and birth year also may determine which age makes the most sense for you to retire. Birth years that have a younger full retirement age may be able to afford the few months of lowered benefits. Those who are curious about their benefits can call the Social Security Administration at 800-772-1213 or go to the website to view your statement. This will show your lifetime earnings and give an estimate of monthly benefits you can receive at different ages.
Pensions can also impact benefits. For those that didn’t pay into the system for a period of time due to not being required to pay Social Security taxes may face a reduction. Those who paid the entire time of working are much less likely to be affected, especially if you worked for only private employers because the two are separate. This is also the case because the person paid into both systems and therefore will receive both.
Government or those employed by a foreign employer may have reduced benefits. Calling or going to the website of the Social Security Administration will answer any questions about future Social Security payments.
If you have other questions about Social Security, Disability, or related issues, contact our team at Jonathan Perkins Personal Injury Lawyers. We understand the law and will put our knowledge to work for you.