Show Me the Money: About Social Security and Pension Payouts

10:54 am Uncategorized

Money Magazine recently compiled a useful guide regarding Social Security and pension payouts:

The best age to start collecting Social Security is 70. Even though it may be tempting in these days of high unemployment and financial stress to take Social Security as soon as you can, if you take an early benefit at age 62, the payment will be 25% less than if you waited until your full retirement age (between ages 65 and 67, depending on your date of birth). If you can delay until you are 70, your benefit will be 25% to 30% more than what you would have received at full retirement age. That’s a difference of more than 50 percent between taking Social Security when you’re 62 versus when you turn 70.

There is a tradeoff to consider, since if you start taking benefits early, you will receive them over more years.  However, we enjoy longer life expectancies today, so a delay will usually pay off.

If your spouse dies, you are entitled to receive his or her Social Security benefits under the Social Security Survivor’s Insurance program.  If you have already reached your full retirement age, you will receive 100% of your deceased spouse’s benefit.

If you have not yet reached retirement age, but are 60 or older, your payout will be between 71% to 99% of your deceased spouse’s full benefit. If you have a child under the age of 16, you are entitled to a 75% payout, no matter what your age.

And what about a deceased spouse’s pension? Whether or not you receive benefits as the surviving spouse depends on what choice your spouse made for benefits distribution – either a monthly payout based on his/her life expectancy, or the “joint and survivor” benefit option. If they chose the “joint and survivor” option, you are entitled to pension benefits as the surviving spouse.

If you need help with financial planning for your retirement, contact our California estate planning law firm.

Help is available to you by contacting your Southern California financial planning experts today.

Leave a Comment

Your comment

You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>

Please note: Comment moderation is enabled and may delay your comment. There is no need to resubmit your comment.