2021: When Social Security Changes Forever

hey everyone Social Security benefits are changing forever at the end of 2020 once the calendar rolls over to 2021 you'll never be able to get as much in benefits hang on for just a few minutes and I'll tell you what I'm talking about [Music] Before we jump in to today's video would you consider subscribing to my channel in the near future we're releasing not only new videos but we're currently in the process of having some calculators developed that I'm completely convinced will help you plan for or live in an awesome retirement so hit that subscribe button below and then click the bell so you'll be notified every time we release new content and we have lots of content coming up ok so under the original Social Security Act of 1935 workers had to reach age 65 to receive a full retirement age benefit now this full retirement age was simply based on what many state pensions and the Railroad Retirement System used as 865 so the Committee on Economic Security and that was the group that designed the us of security system designed to go with an AIDS that was already commonly used by more than half of the pensions out there but just as a side note they also considered using 870 but ultimately decided that 865 maybe a little bit more reasonable now the for retirement age didn't change all the way from the inception of Social Security until 1983 by the way that was the one other time in history where the Social Security trust fund faced a crisis and nearly ran out of money to keep this from happening the National Commission on Social Security reform which is more commonly referred to as the Greenspan Commission and that's because Alan Greenspan was the chairperson of that committee they made a series of recommendations to Congress about how they should keep the program solvent for the next 50 years what are their big recommendations was to increase the full retirement age to 67 but to make this change a little easier to digest they recommended that the change only impact those who were more than 20 years away from for retirement age and that the change would gradually phase in over a period of 22 years once it started so the first changes started with those that were hitting for retirement age in 2003 and the change went from 65 and gradually moved up to 66 it stayed at 66 for 11 years but now it's going up again for those born between 1955 and 1959 the full retirement age is gradually increasing all the way up until birth year 1960 at which point full retirement age will be at 67 so this takes us back to the beginning where I said you'll never be able to receive as much in benefits in 2021 or later and here's why for years we've used nice round numbers when calculating the impact of filing for Social Security benefits early or later we've said that if you file at 62 you'll get 75 percent of your full retirement age benefit and if you wait until 70 you'll get a hundred and thirty two percent of your benefit amount but not anymore because these increases in reductions are calculated on a monthly basis once full retirement age increases there will not be as many months for benefits to increase by once you hit full retirement age if the inverse will also be true the reductions for filing at the earliest age will be steeper because there will be more months between a 62 the earliest age you can file and your full retirement age this is why I stress understanding how to calculate the reductions and increases on a monthly basis here's how they work for every month after for retirement age benefits increased by 0.67 percent for the first 36 months immediately preceding for retirement age benefits are decreased by 0.56 per month and for more than 36 months benefits are decreased by 0.4 2% per month here's how this changes the benefits and reductions if we look at filing at the earliest age and at the latest a currently the Social Security filing window is between 62 and 70 if you're filing for your own benefits you can't file before 62 and it just doesn't make sense to file after age 70 so for those born between 1943 and 1954 the for retirement age is 66 that's where you're entitled to 100% of your benefit amount now you can file as early as age 62 but you'll receive 75% of your benefit if you file at age 70 you'll receive one hundred and thirty two percent of your benefit but once the full retirement age starts moving up it all changes and once these changes are fully implemented you'll still be able to file at 62 but you'll only receive 70% of your for retirement age benefit and if you delay your benefit will only increase to one hundred and twenty four percent instead of one hundred and thirty two percent all of these changes underscore why I stress staying informed about your retirement plan this is your retirement and no one will feel the pain of mistakes like you will so own it one of the ways you can take charge is by getting informed you can start by picking up a copy of my book on Amazon now I can't guarantee this but I'm pretty sure you'll get more value than the twelve dollars it cost there also be sure to subscribe to this channel and click the bell for notifications thanks so much for watching [Music] [Music] [Laughter] you [Music]

Channel: Devin Carroll

Views: 1,396,748

Rating: 4.8067193 out of 5

Keywords: social security changes, social security, social security benefits, retirement, devin carroll, devin carroll social security, financial planning

Id: SUdE2AEkkyQ

Length: 6min 11sec (371 seconds)

Published: Sat Dec 08 2018