Many investors rely on Social Security benefits to supplement their retirement income. You have been paying into the Social Security fund your entire working life. These benefits are owed to you based on the number of years you’ve worked and how much you earned. Your primary benefit is the amount you would receive at your full retirement age, which ranges from 66 to 67, depending on your birth year. You can take benefits as early as age 62, but this permanently reduces your benefit by up to 30%. You can also delay benefits until age 70, which permanently increases your benefit by 8% for every year you delay beyond full retirement age.
On the surface, it’s easy to think, “I’ll wait and boost my benefit so I can get the absolute most from the government.” If you knew when you were going to die, you could easily decide if you wanted to receive less for more years or more for fewer years. Many investors try to estimate their breakeven point, factoring in their health and life expectancy.
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