November 19, 2015 1:00 am
“Millions of Americans are likely to face financial insecurity in their retirement years,” says CFPB Director Richard Cordray. “Deciding when to start claiming Social Security benefits is one of the most important financial choices a consumer will make. The CFPB’s ‘Planning for Retirement’ tool can help consumers clearly see their options.”
According to the report, many Americans collect Social Security benefits early, despite living longer. On average, Americans reaching age 65 today will live to age 85, meaning they’ll likely need sufficient income and savings to cover 20 years or more in retirement. Additionally, approximately two-thirds of the nearly 40 million Americans aged 65 and older who receive Social Security benefits depend on it for 50 percent or more of their retirement income. For a growing number of beneficiaries aged 80 and older, Social Security benefits account for 70 percent or more of their income.
Americans are eligible to claim Social Security retirement benefits without any reduction at their “full retirement age,” according to the Social Security Administration. For people born after 1942, full retirement age ranges from 66 to 67, depending on the year the person was born. Individuals can also claim their benefits several years before, agreeing to take less money each month, or they can claim several years after and get bigger monthly checks.
Generally, the amount an individual receives from Social Security is a one-time choice. This means if an individual claims the reduced or increased benefit, they receive that amount for the rest of their life, with annual cost-of-living adjustments.
The tool can be found at www.consumerfinance.gov/retirement/before-you-claim/.
Published with permission from RISMedia.