What do you really know about Social Security?

What do you really know about Social Security?

Social Security is easy to understand and implement.  Right?  Not so fast.  There are a few things you might want to know since only 1 out of every 1500 people get it completely right.

It matters when you start collecting
If you think you receive the same monthly benefit based on your earnings no matter when you start collecting, think again. If you collect benefits from Social Security before reaching full retirement age, you are electing a lower monthly benefit amount for your lifetime.  If you do wait to begin collecting benefits until after you have reached full retirement age, you will be eligible for delayed retirement credits.  This means your benefits increase by 8% for each year of your delay.  In all, you can add up to 32% more to your total benefits until age 70 when delayed retirement benefits end.

It matters when you were born
Your full retirement age is based on when you were born. If that was between 1943 and 1954, your full retirement age is 66.

Social Security and Medicare are different decisions
Even though both Social Security benefits and Medicare are both initiated through the Social Security Administration, they are two different decisions.  Medicare can be elected separately from Social Security and the qualifications for Medicare are different than for Social Security.

Bottom line, deciding on when to elect Social Security is a part of your financial life planning, but not the whole picture.  The decisions you make now can impact your retirement picture significantly.