How To Earn A Guaranteed 8% A Year

What good is time without money? Many soon to be retirees are finding out that fact. Unfortunately, an overwhelming number of retiree’s have inadequate retirement savings, with 60% by some estimates, relying on Social Security as their primary income source during retirement.

 

The Social Security Administration incentivizes beneficiaries to delay claiming benefits prior to their Full Retirement Age (FRA) by decreasing future benefits, or rescinding some or all of a beneficiary’s benefit. Retiring prior to your FRA, now age 66, will reduce benefits by up to approximately 25% if claimed at age 62. Individuals who are receiving Social Security benefits prior to their FRA will have a reduction in benefits of every other dollar earned over $18,240.

 

Each year you delay claiming benefits after age 66, you will receive a guaranteed 8% increase in benefits until age 70. Also, once you reach FRA, there is no cap on how much you can earn, while receiving Social Security benefits. The size of the annual increase in benefits when claimed after your FRA, is larger than the reduction in benefits for claiming benefits early. Delaying benefits until age 70 will increase benefits by 32% above your FRA benefit.

 

Deciding when it’s best to take benefits is a more nuanced decision than most people realize. If you need advice on when it’s best to commence your benefits, contact the team at Ogorek!

 

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OWM provides financial planning, investment management, and retirement coaching to affluent individuals, business owners, and families.