Figuring your break-even age will help you determine whether the extra payments you receive by starting early outweigh the higher payments you would receive by starting later.
Once you find your break-even age, you must consider your life expectancy. Are you in good health? What’s your family history? Do you have dangerous hobbies?
If you expect to live longer than your break-even age, you may want to consider delaying the start of your retirement benefits. If you don’t expect to reach your break-even age, you may want to consider starting your retirement benefits earlier.
What you don’t want to do is outlive your income. This is known as longevity risk.
The government is considering the following possible changes to avoid a Social Security crisis:
Just keep in mind that Social Security usually provides about one-third of a retiree’s income. So at least two-thirds of your retirement income needs to come from other sources such as personal savings, investments, employer-sponsored pension programs, traditional and Roth IRAs or a 401(k).
This information is general in nature and is not intended to be tax, legal, accounting or other professional advice. The information provided is based on current laws, which are subject to change at any time and has not been endorsed by any government agency.