When planning your retirement, the first question you may ask is the date you plan on retiring. Early? Late? It is important to know. The IFW has a retirement guide and a retirement roadmap that can help you set up your retirement savings for a successful and fruitful retirement.
It is with our expertise that we also recommend delaying retirement can significantly increase your retirement income, even if it is only delayed by a few years. Retiring later will give the chance to bulk up the savings. The IFW wants to show you all the benefits of retiring at 70.
Is 70 a Good Age to Retire?
Claiming Social Security before the full retirement age (FRA) can lead to a reduction in benefits – as much as 25% to 30% less – than if you wait. This reduction is a permanent one. By waiting to take your benefits until after you reach the FRA, Social Security will add an 8% delayed retirement credit to the monthly payout each year you hold off up to the age of 70.
This guaranteed return of 8% per year of delay after your FRA is more than could be received with any other fixed products right now. Even more than the cost of living (COLA) that Social Security beneficiaries get for the past decade, averaging around 1.5% a year. This is part of why it is better to retire at 70.
Life Expectancy Is a Crucial Factor
When it comes to retirement and collecting social security, one of the biggest factors in planning for both is life expectancy. On average, a person who lives to the age of 65 can expect to live another 19 years. This means that your social security benefit at 70 is more than 75% higher than your benefit at 62. Plus, if you are married, the lower social security payment will go away when your spouse passes away. If the spouse with the greater Social Security wage history was longer, as long as possible until the retirement age of 70, for the benefits, then they will leave behind a bigger benefit for the surviving spouse.
Many baby boomers won’t have an employee pension to count on, so maximizing Social Security’s reliable income stream.