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Social Security was created in 1935 to provide a financial security net to the elderly in the country and then extended to include advantages for people with disabilities. Today, the program supports approximately 66 million beneficiaries, or 20% of the American population, according to the Foundation Peter G. Peterson . About 90% of people over 65 receive their social security benefits and this income represents around 30% of the total income of older Americans, according to the organization.

For many people retired, social security can serve as a financial rescue - and these advantages cannot happen early enough. However, experts say that you must carefully consider your options before deciding to submit a complaint. Most often, they say, the delay in social security can be accompanied by major financial advantages.

Joel A. Larsen , CFP, AIF, director at Navion Financial Advisors , says that the first step is to calculate your "uniform break" - the point you expect to obtain more social security in relation to the claim at the Age of the Full Retirement (FRA). Although none of us can predict the future, he recommends asking you: "Are there factors that could make you have a shortened lifespan? peer "" ""

He adds that it is not always beneficial to delay the complaint of social security. "It is much more complicated than the simple calculation of the even break" using life expectancy, "he said Better life. "Where will the money come from to pay for your expenses if you delay the request? For example, does the benefit of the delayed complaint prevail by the additional income taxes if you take the money to 'A qualified retirement account?

However, many Americans will find that the delay in social security is the best financial decision. Read the rest to learn the greatest advantages of the cancellation of payments, according to experts in finance.

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Many people have the right to start taking their social security payments once they reach the age of 62. AE0FCC31AE342FD3A1346EBB1F342FCB

"The initiation of Social Security at 62 has an immediate negative impact on your retirement income", explains Regina McCann Hess , CFP, CDFA, A Certified financial planner and author of Super woman wealth . "Assuming that your full retirement age (FRA) is 67 years old, and you wait until then to activate your advantage, you will receive your total amount. However, if you light it early at 62, you will receive around 30 % less. . ""

To illustrate how large the difference can be, Hess says that someone who is entitled to $ 1,750 per month at 62 ($ 21,000 per year) is entitled to $ 2,500 per month ($ 30,000 per year ) at 67 years old. This difference lasts for the rest of this person's life, radically changing their finances.

In retirement planning, many people underestimate how much they will need money to respond to their expenses. If you calculate the advantages of taking a social security early according to your current expenses, you can be cruelly disappointed because inflation increases the cost of your daily necessities.

"Each dollar has retired," said Hess. "Inflation can have a huge impact on your retirement lifestyle. The strategy of your retirement income is a necessity to reduce the impact of inflation on your lifestyle. The implementation of your services social security could have long -term impact. "

Melissa Murphy Pavone , CFP, CDFA, investment director for Oppenheimer & Co. Inc. , add that many people neglect the impact of retirement health care costs. "This additional expense, if it is not taken into account, can quickly exhaust retirement savings," she said.

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Taking early social security can also have an impact on your income if you still work. Actually, Kendall Meade , a financial planner for Sovi , said it is one of the greatest errors that she sees people made in their retirement planning.

"If you are under the full retirement age, $ 1 of your services is deducted for each $ 2 that you earn above the annual limit ($ 22,320 for 2024). This has already obtained a reduced amount for the deposit, "she said Better life. "If you still work, it can be useful as long as possible (70 years)."

"It is important to note that once you reach the full retirement age, you can work and receive 100% of your advantage," said Hess. However, Meade notes that your advantages can be imposed at a higher rate if you continue to work, even if you have reached this step.

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The delay in social security beyond your FRA results in an even more important monthly payment, which lasts the rest of your life.

"Waiting until the age of 70 to activate your social security services can add an additional 24% to your advantage. Talk about the strategy of your retirement income! This can add thousands of dollars to your pocket each year" , explains Hess.

Returning to his previous example of someone who takes $ 1,750 per month at 62 and $ 2,500 per month at 67, Hess says that the same person can expect to receive $ 3,100 per month ($ 37,200 per year) at the age of 70 years. This represents a difference of $ 16,000 each year between the highest and lowest possible payments.

Scott Lieberman , founder of Touched money , says that the delay in social security will also give you the possibility of spending the minimum distributions (RMD) required on your retirement accounts. It is the money of your retirement savings that you must legally withdraw each year.

"You should always spend RMDs before Social Security," said Lieberman Better life. "This is because social security is a maximum of 85% taxable, while RMDs are 100% taxable. This can help you save even more at the time of tax."

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Pavone says that there is no "single size" response to know how or when to activate social security services: “There are many factors to consider; The desired retirement age, the expected lifespan, lifestyle objectives and expected expenses, to name only a few. ""

It recommends hiring a certified financial planner who can help you navigate in your particular situation, maximizing your payments while minimizing your tax charge.

"A CFP can provide personalized advice adapted to your financial objectives and risk tolerance, helping you to sail in market complexities and answer questions of a million dollars," she shares. "How much should I save for retirement? Should I go back to work? Will I retire comfortably? Should I activate Social Security? How will I pay for health care?"

She adds that meeting a CFP in the years preceding retirement can ensure you have a solid strategy, offering you peace of mind before starting to move to retirement income. "The potential to live a long life makes decisions at the time of claiming your social security benefit more important than ever," she said.

Best Life offers the most recent financial information of the best experts and the latest news and research, but our content is not supposed to replace professional advice. Regarding the money you spend, save or invest, always consult your financial advisor directly.