Tools to Help You Decide When to Retire

(August, 2009)

These days, everyone is taking a new look at their finances—and no one is looking more closely than the millions of baby boomers who are nearing retirement age. While some boomers expected to retire at one of the traditional milestones, such as age 62, the current economy is forcing many of them to re-evaluate their plans. Many are wondering if they should work longer, or how their Social Security benefit—or their spouse's benefit—would be affected if they continued working.

To help them find answers, Social Security has published a fact sheet called When To Start Receiving Retirement Benefits. You can read it online at www.socialsecurity.gov/pubs/10147.html.

As most workers know, your choice of a retirement age—from 62 to 70—can dramatically affect your monthly Social Security benefit amount.

If you choose to start receiving benefits early, the monthly payments will be reduced based on the number of months you receive benefits before you reach your full retirement age. The rate of reduction will depend on the year you were born. The maximum reduction at age 62 will be:

• 25 percent for people born between 1947 and 1958.
• 30 percent for people born after 1959.

If you wait until your full retirement age, your benefits will not be reduced. And if you should choose to delay retirement, your benefit will increase up to eight percent a year from your full retirement age until age 70. However, there is no additional benefit increase after you reach age 70, even if you continue to delay taking benefits.

Social Security also has created several retirement planners to help you make an informed decision. Social Security has an online calculator that can provide immediate retirement benefit estimates to help you plan for your retirement. The online Retirement Estimator uses information from your own earnings record, and lets you create "what if" scenarios. You can, for example, change your "stop work" date or expected future earnings to create and compare different retirement options.

To use the Retirement Estimator, visit www.socialsecurity.gov/estimator.

Read When To Start Receiving Retirement Benefits at www.socialsecurity.gov/pubs/10147.html.

And for general information about Social Security, visit www.socialsecurity.gov.

Retirement decisions are unique to everyone. Make sure you are up to date with the important information you will need to make the choice that's right for you.

Ginny Jordan is a Public Affairs Specialist for the Social Security Administration. Her weekly column on all things Social Security appears in the Sunday Edition of the Sun-Sentinel.

Ginny has agreed to let us reprint her articles here for your convenience.

Thank you Ginny!