Don’t be too quick to retire
Ready to start drawing Social Security retirement benefits? You might want to hold off a bit.
Around Minnesota, only about one in five people receiving Social Security retirement benefits waited until full retirement age to start their payments, according to the Social Security Administration.
Workers can start taking Social Security at age 62. But for those who can wait, the benefits go up.
“If you need Social Security early, take it – you’ve earned it,” said Virginia Reno with the National Academy of Social Insurance, a nonprofit organization based in Washington, D.C. “But waiting even a year or two can make a big difference in the long run. The extra benefits are there for life.”
Payments increase by 5 to 7 percent for each year of delay between ages 62 and 66, and by 8 percent for each year of delay between ages 66 and 70. The increases stop at age 70.
For someone who can wait until age 70 to take Social Security, the reward is a lifetime monthly benefit that is 76 percent higher than if taken at age 62.
For example, a worker who qualifies for a Social Security benefit of $750 at age 62 would receive $1,000 by waiting until full retirement age (66 for people born in 1943 to 1954). By waiting until age 70, the retiree would receive $1,320 a month.
The higher benefit would also be the basis for future inflation adjustments.
It’s not just important to retirees, Social Security retirement spending provides a serious boost to county economies across the nation.
Take a look at the 2012 numbers, provided by The Daily Yonder, published online by the Center for Rural Strategies:
In Becker County, population 33,000, nearly 19 percent (6,105 people) received Social Security retirement benefits. The average monthly payment was $1,121 – with more than $82 million in total Social Security retirement income flowing into Becker County.
Nearly 5,000 more Becker County residents were also in the pipeline for retirement benefits, since they were between the ages of 55 and 64.
The program accounts for 6.2 percent of total personal income in Becker County.
It’s even more important in Hubbard County, where 22 percent of the population (of 20,347) received Social Security benefits in 2012.
Nine percent of Hubbard County’s total personal income came from Social Security retirement funds. That amounted to more than $62.2 million for the entire county, with the average person receiving $1,150 a month.
In Mahnomen County, the average monthly amount received from Social Security was $983, the lowest in the state. Just 4.2 percent of the county’s total personal income came from SS retirement.
In Otter Tail County, more than 20 percent (nearly 12,000 people) of the 57,000 population were receiving Social Security retirement benefits. Clay County, population 60,000, saw 11 percent receiving Social Security retirement benefits that average $1,175 per month.
Before retiring, take a good long look at all the options.