What Are the Benefits of Early SS Retirement?
America's safety net for retiree's, Social Security, allows people to receive their benefits up to five years before the accepted retirement age for the program. Although this comes with a penalty, some people may still find it beneficial to get their benefits early.
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Benefits
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Early retirement also means that the recipient receives benefits for a longer period of time than someone who retires at the standard age.
Break Even Age
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In order to reap the benefits of a greater pension by retiring on time or later, the individual will need to live long enough to outpace the amount of money they would have received from the greater amount of years spent in early retirement.
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Considerations
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Retirees must also factor in other pensions when planning retirement. Getting Social Security early allows the retiree to let other retirement savings to grow. Except for people who do not expect to earn much return on their other savings, retiring early is usually the best option, according to Thomas Dalton of the CPA Journal Online.
Expert Insight
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Thomas Dalton of the CPA Journal Online believes that the simplest way to make a decision on the benefits of early retirement depends on how long the person believes they will live. Then they simply need to multiply their benefits times the number of expected months, for all options.
Warning
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Those who want to collect Social Security early and stay employed should keep in mind that Social Security becomes taxable income, at least in part, when the person has other sources of income that put total earnings above $25,000 for the year.
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References
- Photo Credit Image by Flickr.com, courtesy of renee.
