"Social Security is only designed to replace about 40% of your working income, according to the Social Security Administration. They add, "Your full retirement age is 67. Starting retirement benefits before your full retirement age (as early as age 62) lowers this percentage, and starting benefits after your full retirement age (up to age 70) increases it." In addition, eligibility for retirement benefits starts at the age of 62."
"But if you wait until your full retirement age, you'll receive 100% of your earned benefits. For every year you wait beyond full retirement up to 70, you can receive another 8% boost to your benefits. "Everybody thinks Social Security isn't going to be there. Everybody is scared to death, but I wouldn't be," says Orman, as quoted by Kiplinger.com. By claiming early, "you're passing up an 8% increase each year in your Social Security from your full retirement age all the way to 70.""
"Also, with the average retired worker collecting just $1,979 a month in Social Security, relying on benefits too heavily puts many Boomers at risk financially, especially if they have an unexpected expense pop up."
Many nearing retirement risk financial setbacks by claiming Social Security benefits too early. Social Security replaces roughly 40% of working income and eligibility begins at age 62, while full retirement age is 67. Claiming before full retirement age reduces benefits, while delaying benefits up to age 70 increases them by about 8% per year. Average retired-worker benefits are only $1,979 per month, making heavy reliance on Social Security risky for unexpected expenses. Financial advisors warn against depending solely on government benefits and recommend building personal savings. About two-thirds of Baby Boomers lack sufficient retirement savings and face potential resource shortfalls.
Read at 24/7 Wall St.
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