Social Security: What is the best age to start collecting?

Have you ever wondered how the FICA tax information on the payroll affects your future pension benefits?

FICA is a payroll tax equivalent to both Social Security and Medicare, which represents a 7.65 percent contribution from each paycheck, an amount your employer matches. It will be deducted from your first pay cycle until you retire when you can obtain benefits.

But it can be difficult to argue that social benefits can be a difficult business.

MORE FROM FOXBUSINESS.COM … [19659005] Here is a list of a few well-known social security benefits. Putting the knowledge into good use can make a big difference in your retirement income.

1[ads1]. There are many ways to claim benefits

There are many ways to collect social security benefits, says Alicia Munnell, director of the Center for Retirement Research at Boston College.

You can collect your own benefit from the age of 62 or at any time until you are 70. Those who gather early receive a smaller monthly payment because they usually collect benefits over a longer period than those who wait.

It is generally advisable to wait at least until you have reached full retirement age to start collecting social security because the monthly benefit is so much higher. For example, if you were born in 1955, your full retirement age is 66 years and 2 months. It would be the age where you can collect 100 percent of your benefit.

But if you start collecting 62, you will only get 74.2 percent of the monthly benefit. If you delay your benefit to 65, you will get 92.2 percent of the benefit. After full retirement age, your benefit increases by 8 percent a year up to 70 years. The benefit does not exceed 70, so it no longer pays to wait.

Likewise, if you receive social security benefits as a spouse, the longer you wait, the greater the benefit, provided the salaried employee or wife has waited until full retirement age to begin collecting.

2. It is a gamble either

Some people advocate taking out social security benefits on the first occasion.

Doug Carey, founder and president of the Financial Planning Software firm WealthTrace, says Social Security doesn't look like an odds maker, but it requires long-term commitment.

For example, the break-even point for someone who has earned the inflation-adjusted approach of $ 70,000 per year for 35 years is about 80 years old. If this person waits until 70 to claim Social Security and lives for at least 90 years, he will accumulate nearly $ 162,000 more in benefits than he would if he had claimed at 62. But there is an opportunity to lose the bet and not get anything .

Retired lawyer and social security expert Merton Bernstein says the odds of winning the long-term game are bad – so claim early. "You never know when the clock will ring. I subscribe to the Woody Allen principal:" Take the money and run. ""

3. Be Smart About Timing a Divorce

If you do not love your marriage after 9 1/2 years, hold off at least six months before submitting your divorce.

Why? You must be married at least 10 years in order to claim your previous spouse's social benefits. If you terminate your marriage after nine years and 11 months, you are not eligible.

If you do so for 10 years, you can collect a social security benefit on the basis of up to half your previous income or on the basis of your own earnings, whichever is higher. This is especially important if a parent lived at home with the children while the other was working.

4. A former spouse may collect late spouse

If a former spouse dies, you may receive benefits such as a widow or widow. If you are at least 60 years of age, your marriage has lasted at least 10 years and you have not congratulated yourself before 60 years, you will most likely be able to gather your husband's benefit.

How much you receive depends on the ex-spouse's earnings. Contact the Social Security website to see examples of survivors' benefits.

5. Benefits for widows and widowers are more flexible

Social security does a good job of explaining widow and widow's money, but it does not clarify a key difference between widow and widower's and spousal benefits.

A widow or widowed widower can begin collecting social security benefits based on his own profits, and then switching to surviving benefits. Or they can start with survivors' allowances and later switch to benefits based on their own profits – even if they submit before full retirement age. You can't do that with spousal benefits anymore. An exception has been made for those who were 62 years old before January 2, 2016 – before social security changed the rules.

In other words, a widow can begin to draw surviving benefits on her Swedish social security when she is as young as 60, but only at a reduced price. Then she can choose to leave her own Social Security alone so that it can grow in value to her full retirement age, or even 70 years. This also works for widowers.

6. Use a Lawyer for an SSDI Application

When applying for Social Security or SSDI, you should first hire a lawyer or other expert advisor.

Allsup, a private company that advises people on how to get SSDI, says Social Security does not make it clear that an applicant can have representation from the beginning of the application process.

Two-thirds of SSDI applicants who file on their own are denied, according to some estimates. Another site that can match SSDI lawyers in your area is, run by NOLO.

7. The magic number is 35

The privacy site explains how your benefits are calculated, but it is difficult to follow. An easier explanation can be found at, sponsored by the National Endowment for Financial Education.

Your social insurance is calculated using a complex calculation based on an average of 35 years of covered salary. Each year's salary is adjusted for inflation before it becomes average.


If you worked for more than 35 years, the government will spend the highest 35 years. If you worked less than 35 years, the government will average in zero for the years you are missing.

You don't have to be a mathematical genius to figure out what it affects – it drops your average. If you can avoid zeros by working longer, you increase the payment for Social Security.

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