Summary of Chapter 1: Increasing Your Benefits by Selecting the “Right” Application Date
This chapter reviews the increased importance of Social Security retirement benefits. Readers look into who is eligible for Social Security benefits, the Social Security credit system, how to download your individual Social Security Statement and make any necessary corrections. Next you’ll see how longevity affects the optimal age for claiming benefits. The chapter goes on to examine how early retirement reduces benefits for the claimant and his or her spouse. The reduction of benefits for early retirees is further explored in a comparison table of cumulative payments to age 95 for an individual who retires at 62, full-retirement age (FRA) and 70. Next you’ll see how to calculate the break-even age for early retirement. In other words, at what age will the early retiree receive less benefits than if he or she retired at FRA. The chapter goes on to show how early retirees have to pay taxes on their benefits and illustrates what the SSA includes as taxable “earned income”. The chapter concludes by stating that currently individuals can earn a benefit increase of 8 percent per year by delaying claiming benefits. Additionally, the increased monthly benefit raises the first survivor benefit. Therefore delaying claiming benefits until 70 is the easiest way to increase monthly benefits.
