When you are getting ready to retire, you have to make sure your money is set. Not only should you plan for unexpected costs, such as medical bills, but you should also look at what funds you expect to receive from the government. Social security planning should be part of your pre-retirement considerations.
Most people plan to retire when they are 62 years old. While that may seem like the best time to start enjoying your post-work life, it may not actually be the best time to start drawing from the government. The average pay-out at 62 is $17,200 a year, below a living wage. However, if you wait until age 67 you could get 43 percent more with annual benefits of $24,600. Those who can wait until age 70 to start drawing can earn as much as $30,500, a 77 percent increase over what they would have received at age 62.
By drawing at the earlier age, you actually limit yourself to that earning potential. This can make it impossible for married couples to boost their lifetime benefits, which could have been achieved by waiting just a few years. On the flipside, by waiting you could end up leaving money with the government if you die unexpectedly. When you are trying to determine the best retirement age, you need to consider your current health situation before applying or delaying application for your benefits.