Plan Ahead

Financial advisers say there’s one key mistake to avoid when heading into retirement. It involves your Social Security. Claiming Social Security too early is one of the biggest mistakes retirees can make. For retirees, Social Security can make up as much as 83% of their income, which is a lot, especially for people with low income. Therefore, it is really important to avoid making mistakes when you claim these benefits.

An important note to remember is that, once you claim your Social Security benefits, it is almost impossible to go back and change your mind. Then, you are stuck with that decision for your entire retirement. Although you can claim your benefits at age 62, and many people do this, it is better to wait until a later age. Starting to claim benefits at the youngest age locks in the lowest possible monthly payment. Waiting until age 70 increases your monthly amount paid by 8% per year past full retirement age (which for most people is about 65-67 years old). If you are married, you might want to consider waiting until age 70 for the highest earning spouse to claim Social Security, which increases the amount of income the couple receives.

It also insures that the surviving spouse gets the largest amount of money when the other spouse dies. Other decision making factors should be whether you have another source of income, as well as the state of your health. If you have a chronic health issue, the decision to claim benefits early might make more sense. You can go to www.ssa.gov to find your full retirement age. You can also go to AARP to check out any other rules that may apply to you and your benefits.