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An Analysis of Claiming Ages and the Impact on Benefit Amounts

As most folks approaching the point of claiming Social Security benefits, the age at which you file makes a significant difference in the amount of that monthly payment. The Motley Fool’s Adam Levy illustrates this difference in a series of charts showing the progression of benefit amounts at yearly intervals from age 62 to 70 (the current age at which benefit incentives end), along with calculations showing the “breakeven” point associated with data points. His article also relates the implications of life expectancies as reported by the CDC. The result of this analysis is the conclusion that “the average retiree should wait until age 70 to claim benefits to take advantage of the imbalance in the Social Security program as it stands today.”

The “imbalance” noted by Levy relates to this basic premise: “Maximizing your lifetime Social Security benefit hinges on one very important number: How long do you expect to live?” Therein lies much of the problem in Social Security’s financial future, since a retiree claiming benefits at age 62 is statistically likely to draw those benefits for much longer than the program has been designed to accommodate. With many claimants drawing benefits for decades, many are coming to realize that the full retirement age–currently age 67 for those born in 1960 or later–may need to be examined in comparison to current demographics.

Read Mr. Levy’s post here.

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