Social Security: Deciding when to take retirement benefits

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BUFFALO, N.Y. (WIVB) – You can start collecting Social Security retirement benefits as early as 62 or as late as age 70.

Your monthly benefit will be different depending on the age you start collecting.

If you choose to collect benefits early, they’ll be reduced based on the number of months you receive benefits before reaching full retirement age.

If you haven’t figured it out yet, there’s no one “best age” for everyone. It can be tricky – because no one wants to leave money on the table by making the wrong decision.

“A lot of it depends on your own personal health, your own personal situation,” said Charles Jeszeck, who’s with the U.S. Government Accountability Office.

He says people are living longer.

“The longer you wait the larger the benefit that you get.”

Reductions in benefit amounts also depend on the year you were born .

According to the Social Security Administration, the maximum reduction at age 62 will be 25 percent for people who reached age 62 in 2013, and 30 percent for people born after 1959.

You could also see a change in amounts if you work after you start receiving benefits.

Some people wonder, “Will I get more if I start collecting early?”

“No. That’s a fallacy,” according to Anthony Ogorek, an investment advisor and founder of Ogorek Wealth Management in Williamsville.

He says the decision should be given careful consideration.

“You could have a 32 percent increase if you go from your full retirement of 66 up to 70, and you could have a 32 percent decrease going from your full retirement down to the earliest time you can access it,” he said.

Again, your monthly benefit amounts will be different based on the age you decide to start collecting.

Let’s assume you get a benefit of $1,000 at your full retirement age of 66.

If you start collecting at 62, your monthly benefit drops to $750.

If you delay benefits until age 70, your monthly benefit increases to $1,320.

“You’re going to be whacked 8 percent a year for each year that you take them before your full retirement age,” Ogorek explained.

That’s a big deal, especially considering that among elderly Social Security beneficiaries, 21 percent of married couples and about 43 percent of unmarried persons rely on those retirement benefits for 90 percent or more of their income.

For Christine Kasprzak of Cheektowaga, “I just had to buckle up, do the best I can.”

She retired early after getting injured on the job, but eventually found another source of income to supplement her Social Security benefits.

These days Kasprzak cooks at the Cheektowaga Senior Center.

It’s a job she loves, and one that helps with expenses.

“It would be very hard. It really would. As it is now, I even try to avoid driving to different places and stuff,” she said. “So I don’t have to keep filling up the gas tank, or even food-wise. I’m very cautious what I buy. What I eat.”

There are some factors to consider before deciding when to take Social Security retirement benefits.

• Your health
• Your savings
• Continued work
• Dependents
• Working spouse

“You really can’t ask your friends what are you doing. And then think you’re going to do the same thing because your situation’s different,” Ogorek explained.

Christine Kasprzak was disappointed when she learned what she’d be getting from Social Security.

“I thought I’d be getting a lot more for all the years that I’ve been on the working force. I was quite disappointed,” she said.

For some people it makes sense to take benefits early — after all, Social Security is meant to help supplement the wages you made when you were working.

“It’s insurance to protect you from outliving your assets. So that you’re not living on the street when you’re old and unable to work,” said Charles Jeszeck, director of Education, Workforce and Income Security Issues with the General Accountability Office.

A recent study done by Jeszeck’s agency examined the extent to which people understand Social Security rules impacting their retirement benefits.

The study concluded, “…certain key information is not provided or explained clearly during the claims process.”

“Given the near-universality and broad dependence on Social Security for retirement income, improving the claims process could have a significant impact on people’s retirement security,” the GAO study stated.

When to take Social Security retirement benefits is perhaps one of the most important financial decisions a person will make in their lifetime.

Anthony Ogorek says it’s “highly individualized,” and should viewed as an investment decision.

“There are no things on this earth that can give you a guaranteed 8 percent rate of return. This is one of them, which is why we really advise people to look very closely at how they make this decision,” Ogorek added.

The Social Security Administration offers a “retirement estimator” that looks at your actual earnings record for a snapshot of what to expect.

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