Currently, full Social Security retirement benefits start at ages 66 and 67, depending on when you were born. Those taking benefits before these ages will get reduced benefits. The earliest someone can begin drawing Social Security benefits is age 62.
According to the Social Security Administration, the average monthly retirement benefit is $1,827. Retirees also received an 8.7% Social Security cost-of-living adjustment in 2023. The maximum Social Security benefit is $3,627 per month.
While about 90% of workers begin drawing on Social Security before age 70, most would benefit by waiting until they turn 70. Those who fall in under the 90%, specifically for claimants ages 45 to 62, could potentially lose up to $182,370 in lifetime discretionary spending per median household.
Waiting until they turn 70 may seem like a bridge too far for some. However, to obtain full benefits, 70 may soon become a reality. With Social Security’s trust funds dwindling, lawmakers are looking for ways to ensure new entrants into the benefits program actually have something to benefit from.
What that means for people not already drawing Social Security benefits is a minimum age of 70 to receive full benefits. In addition to increasing the age requirement, high-income earners may have to pay more into Social Security through Social Security payroll taxes. Currently, Social Security taxes only apply to wages up to $160,200.
Senate Democrats are seeking to apply Social Security taxes on wages over $250,000. Additionally, the same plan would require high-income earners to pay a 12.4% tax on business and investment income. As a result, $2,400 per year is expected to be added to Social Security benefits.
Unfortunately, waiting until age 66 or 67 may not be possible for some people. In 2021, 30% of Social Security benefits were claimed at age 62. Common reasons for starting so early ranged from job loss and health issues to caregiving responsibilities.
Let Us Know What You Thought about this Post.
Put your Comment Below.