Social Security Break Even Age Comparison

we're going to explore this social security breakeven here today so stay tuned for the full segment welcome back this is richard with wisdom investor many retirees take their social security at age 62. however others are contemplating waiting until 67 or even age 70 but they're wondering about the social security break-even age when would you accumulate the same amount of money had you collected your social security age 62. so we're going to explore the social security break even here today let's first take a look at some basics on social security we need to understand the social security full retirement age if you were born in 1960 or later your full retirement age is age 67. if you were born before 1960 your full retirement age is 66 and so many months depending on your birth year if you've been paying into the social security system the earliest you can claim social security is age 62. let's take a look if you claim social security early if your full retirement age is 66 and you claim early at age 62 your social security benefit is reduced by 25 percent if your full retirement age is age 67 and you claim it 62 it's reduced by 30 percent if you claim your social security benefit after your full retirement age your social security benefit will grow by eight percent per year to give your maximum social security benefit at age 70. so that gives us an understanding of how the social security full retirement age works and if you take it early or decide to wait so let's take a look at the break even now we're going to look at an example here of taking social security at full retirement age of 67. the average benefit in 2022 at full retirement age is thousand five hundred sixty three dollars per month or equivalent to eighteen thousand seven hundred fifty six dollars per year that's in the middle column if a person was to take their social security early at age 62 it would be reduced by thirty percent that would be one thousand ninety four dollars per month or thirteen thousand one hundred twenty eight dollars per year that's on the top left column and if a person waited until age 70 their benefit would be 1 938 dollars per month or 23 256 dollars per year and that is on the far right column towards the bottom now we're looking at the chart from ages 74 to 85. in the middle column the person that waited until age 67 their full retirement age to start collecting social security it took them until age 78 to break even with the person that took it at 62. the far right column the person that waited until age 70 to take social security it took them until age 80 to break even with the person that started taking it as 62. keep in mind that everyone's social security is going to be a little bit different because we had different wages during our lifetime this is using the average full retirement age at age 67. now for the person that did wait till age 70 they're going to accumulate quite a bit extra if they live till 85. you can see they would earn a total of 372 000 the person that took it at 62 would earn 315 000 by the time they're age 85. of course we all don't know how long we're going to live there's various reasons why some people take it earlier and there's various reasons why other people wait now for the person that doesn't want to take social security early but yet doesn't want to wait until age 70 your best option could be taking it right around the middle at your full retirement age now a lot of this is going to depend on how long you live and none of us really have the answer to that so this answers our question for the social security breakeven age want to thank you for watching stay tuned for our next update

Channel: Wisdom Investor

Views: 4,895

Keywords: Social Security Break Even Age Comparison, calculate social security break even age, compare social security breakeven age, social security breakeven age, social security break even age, how do i calculate the social security break even age, when is the break even age for social security, social security full retirement age, collect social security early, claim social security early, maximum social security benefit

Id: oyHlDPC3lJA

Length: 4min 31sec (271 seconds)

Published: Sun Dec 19 2021