People who are making preparations for the future would do well to have a sound understanding of what to expect from Social Security. Unfortunately, in planning for retirement, far too many individuals rely too much on Social Security benefits and, as a result, their quality of life leaves something to be desired.
Let’s review the benefit basics. You become eligible for Social Security when you reach the age of 66 if you were born before 1955. If you were born in 1955, your full retirement age is 66 years and two months. Full retirement age in the Social Security eligibility context then graduates by two months per year until 1960. People who were born in 1960 and after become eligible to receive their full Social Security benefit when they reach the age of 67.
At the upper end of the spectrum, only the first $110,100 that you earn is subject to Social Security tax (this is the 2012 figure). If you made the maximum taxable amount throughout your entire career you would be eligible for the maximum benefit which is $38,880 per year as of this writing.
If you wanted to, you could retire when you are as young as 62 and apply for Social Security early. Should you do this, you would have to be willing to accept a reduced benefit.
On the other hand, you may work until you are as old as 70 and earn delayed retirement credits in the process. These credits will increase the amount of your benefit when you do apply.
To know exactly how much you will receive in benefits and the most opportune time to start receiving them you should follow a clear-cut, intelligently conceived financial path. If you are ready to get started, the first step is to sit down and discuss your retirement vision with a good Oklahoma City financial planning lawyer.
Author, President and Founding Attorney
Parman & Easterday