Many seniors struggle with the decision of when to claim social security, and for good reason. Many retirees rely on these benefits as their primary source of income, or as an important one.
But what if you do not have to be overly addicted Social Security because you’re sitting on a generously sized nest egg? It may be that you have started financing one IRA or 401 (k) plan from a young age and that you have invested your savings wisely for many years.
If this is the case, and you now have a multi-million dollar nest egg at your disposal, social security can serve as a secondary source of income – and a smaller one for that. In that case, you really can not go wrong when choosing an application age – whichever you decide on.
A less stressful decision
When you expect Social Security to pay most of your retirement bills, you need to be very careful when signing up for benefits. But when you are in the comfortable position of having lots of money for your name, it takes a lot of the pressure off.
Still, it is important to weigh your filing options so that you make the best call for your retirement. You are entitled to your full monthly benefit based on your personal salary history when you reach full retirement age, or OFF. FROM is 66, 67 or somewhere in between, depending on your year of birth.
In the meantime, you are allowed to sign up for social security from kl age 62. However, for each month you apply for benefits prior to OFF, they are reduced.
You can also delay your submission past OFF. For every month you do, your benefits get a boost, right up to the age of 70.
But if you are sitting on a large nest egg, you have some choices. You can decide to claim benefits as early as possible so you get the money faster. Maybe you want to use it to travel freely or sublet an apartment in a busy city you have always wanted to experience. If applying for social security allows you to meet certain retirement goals, it is worth doing.
On the other hand, if you have enough savings to pay your living expenses and travel or meet different goals, then you can take the position that you might as well let your benefits be and let them grow. In that case, you can apply for social security with FRA or even further if it does not stop you in any way if you do not have the money. From there, you have a greater monthly benefit to enjoy life, and if you do not need it yourself, you can give it to your grandchildren or even donate it to a cause that is important to you.
Weigh your choices – without pressure
The benefit of retiring with a taxed IRA or 401 (k) is that you do not have to sweat your social security application so much. Of course, it’s still important to think about it a bit. But know that if you have a large amount of savings, you are really in a situation where there is no such thing as choosing the wrong application age.