A Social Security Benefit Calculator? It's Not Foolproof
Published Thursday, September 18, 2014 at: 7:00 AM EDT
One critical financial decision for soon-to-be retirees is when to begin collecting Social Security benefits. Putting aside other concerns--such as whether you're really ready to retire--it often boils down to whether you want to start earlier, and receive lower monthly benefits, or wait longer to receive higher benefits.
In this high-tech age, it's not surprising that online calculators are springing up, designed to do all of the number-crunching for you. However, while these tools can provide valuable insights, they won't necessarily tell you everything you need to know.
Generally, you can begin receiving Social Security retiree benefits as early as age 62, but you won't qualify for 100% of the benefits you've earned until you reach your full retirement age (66 for most baby boomers). If you wait until age 70 to stake your claim, the monthly benefits will be even higher. Benefits increase by about 6% to 8% for every year you wait between ages 62 and 70.
Online calculators can compare payouts, but they don't always factor in variables such as changing life expectancies or spousal or survivor benefits. Without those additional considerations, you may not end up with the optimal recommendation for your situation.
Schedule an old-fashioned sit-down with us to discuss the scenarios.
This article was written by a professional financial journalist for Preferred NY Financial Group,LLC and is not intended as legal or investment advice.
An individual retirement account (IRA) allows individuals to direct pretax incom, up to specific annual limits, toward retirements that can grow tax-deferred (no capital gains or dividend income is taxed). Individual taxpayers are allowed to contribute 100% of compensation up to a specified maximum dollar amount to their Tranditional IRA. Contributions to the Tranditional IRA may be tax-deductible depending on the taxpayer's income, tax-filling status and other factors. Taxed must be paid upon withdrawal of any deducted contributions plus earnings and on the earnings from your non-deducted contributions. Prior to age 59%, distributions may be taken for certain reasons without incurring a 10 percent penalty on earnings. None of the information in this document should be considered tax or legal advice. Please consult with your legal or tax advisor for more information concerning your individual situation.
Contributions to a Roth IRA are not tax deductible and these is no mandatory distribution age. All earnings and principal are tax free if rules and regulations are followed. Eligibility for a Roth account depends on income. Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).
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