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 Baby
Boomers become eligible for Social Security benefits at age
62. The major question you have to answer is "Should I
sign up now for my benefits or wait until I'm 66 or older* to
get a bigger monthly check?" The answer is, "It
depends." The reason is because the
government penalizes Baby Boomers under the age of 66 who
receive social security payments AND also work.
Generally speaking, retiring at age 62 will yield a monthly
check that is about 70-75% of what it would be if you waited
until age 66. Moreover, if you continue to work (even
part-time), they will only allow you to earn so much each
year before you have to reimburse them at the rate of $2 for every Social Security dollar received! It's
complicated. The Social security Administration even
has a "break-even"
calculator to help you figure out the optimal course.
As Baby Boomers ourselves, here are our thoughts:
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If you're tired of working and need the
money to get by when you quit your job, start taking
Social Security payments at age 62.
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If you intend to continue working, but
would like to start getting Social Security benefits
before age 66, carefully investigate the net earnings
limit before you are penalized. This strategy
works best for those who plan to work part-time or start
a home business.
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If you are concerned that Social
Security benefits will be reduced in the future, start
taking payments at age 62 [Note
that if no significant changes are made to the Social
Security program, the Trust Funds will be exhausted by
2042 and Social Security will be unable to meet all of
its benefit obligations.]
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If you have health problems, start
taking payments at age 62.
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If you plan to continue working and are
pulling in more than $1,000 monthly, delay taking Social
Security benefits as long as you can. This will
boost your monthly benefits payment.
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Generally speaking, the longer you can
put off receiving Social Security Benefits, the higher
your monthly check will be.
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Always arrange direct deposit to a bank
account to prevent theft of your Social Security check!
Click here
to read a good article about the pluses and minuses of
collecting Social Security benefits while continuing to
work. Here is a good AARP
article (August 20, 2009) on "Recouping ‘Lost’ Social
Security Benefits After Going Back to Work." And
finally, here is a good
overview article for Baby Boomers just published
(January, 2010).
 You should be receiving an annual
report for the Social Security Administration detailing your
earnings and estimated benefits by year of retirement.
If not, contact the local Social security Administration at
1-800-772-1213 immediately or go to
www.ssa.gov.
You can roughly calculate your monthly benefits by using the
Social Security
calculator. Apparently, there is a newly
discovered means of reinstating full Social Security
benefits down the road if you retire before the full
eligibility age (say, at age 62 instead of age 66). A
seldom noticed provision in Social Security allows Baby
Boomers who began taking their benefits early, to pay the
money back and reapply at their current age and get a much
higher income for life. Many experts who have looked at the
idea think is is great.
Click here to learn more. Also, here is a good
AARP article on this subject. As a reminder,
you need to sign up for
Medicare close to your 65th birthday, even if you will
not be retired by that time. But if you are getting Social
Security benefits when you turn 65, your Medicare Hospital
Benefits start automatically.
*In 1983, Congress raised the
age at which people qualify for full Social Security
benefits. Once pegged to age 65, the threshold is increasing
gradually until it hits 67 for workers born in or after
1960.
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