How far are you from retirement?
I’m talking about distance in time and finances…
Either way, you’ve worked your entire life and you deserve to retire in comfort. But most retirees struggle once retirement becomes reality.
That’s why I’m here to tell you that being patient (in a very specific way) could make your retirement payouts even bigger!
When it comes to getting the most out of retirement and social security, it’s important to understand that patience can make or break your finances.
You have worked 60+ years to accumulate the benefits you have, or will soon have, so why not hold out just a little longer?
Delaying retirement funds past your eligibility age may prove to be well worth the wait.
62 marks the earliest age that you can collect social security. Many people tap into these savings at the first chance they get, but what they don’t understand is doing this reduces their monthly benefits by 30%!
Obviously, there are other factors to take into consideration when planning for retirement, but many individuals simply can’t afford to prolong this income.
However, most people who don’t face these obligations can avoid this reduction and even earn an additional 8% for each year they hold out from claiming their money.
But like many things, there is a catch…
No, you can’t rack up a never-ending supply of 8% bonuses by sitting on your social security fund indefinitely. Instead, a Full Retirement Age (FRA) is implemented to set a limit for how much you’re rewarded for this patience.
This FRA usually falls around the age of 66 and extends to 70, which means you can compound this 8% up to four times if you’re willing to wait.
Rather than pulling your funds out early and receiving a reduction of 30%, why not delay the process and receive and extra 32% instead?
This strategy literally pays you to be patient!
Even if you’re content with this reduction, you’ll want to consider the actual amount of social security that you’ve managed to rake up.
Social security is based off the 35 years where you earned the most revenue. If you happened to have worked less than 35 years, then these years of no income are counted against you.
This has a significant impact on the total of social security that you can receive, but it doesn’t hurt to work a few extra years if it means increasing this.
Before you make the decision to finally withdraw, remember these tips so you can be sure you’re collecting as much as possible from this fund.