What Older Workers Don't Know About Social Security

I know people who waited until age 65 to draw SS and never drew one thin dime..they are dead!!! If you are waiting for a few dollars more...just remember...maybe you'll reach the golden age of 65, or 70 and maybe NOT!!! How much is it worth to you? Me...I will be starting at age 62!

wb of AR 11:35AM October 18, 2012

DAVID D>

Working beyond 66 -- the Full Retirement Age for those retiring now -- will increase your benefit IF it increases your average indexed income over the highest 35 years of your working life. So if you were out of the labor market for a few years, and only had 33 years covered by SS withholding, then working another year would replace that $Zero with the amount you earned in the calculation of your average wages. Similarly, if one of your years was part-time work while in school, for instance, then a year's income after age 66 could increase your average and hence your benefit.

Past years' wages are multiplied by an index factor to adjust to today's comparable values. If you made $4,000 in 1973, that would be multiplied by 5.50 to get the equivalent for today's income. So 4,000 x 5.5 = 22,000. If you earned more than that in a post-age-66 year -- and if that 1973 income had been one of your 35 highest years -- then the 1973 number would be replaced in the calculation by the higher figure, increasing your benefit a bit.

When you run the numbers, you will find the difference is not enormous. Replacing a half-dozen "old" years that averaged $16,000 in today's dollars with higher-paying current and future years that average over $110,000 -- which would seem to be a pretty dramatic difference -- adds less than $200 to the benefit. The advantage of another year of income and another year of growth of investments (hoping they grow!) and another year of NOT having to draw down savings is much greater than the advantage from another few dollars in your SS benefit.

BILL C>

Best of luck in your fight for good health. There's no question that the claiming decision rests heavily onone's expectation of remaining years. That's the same as the difference between those who buy life insurance and those who buy annuities. THe insurance companies don't price these two products absolutely "fairly" because they know their customers will select the product that gives them the advantage. All those whose grandparents lived into their 90s will buy annuities; others will be more inclined towards life insurance.

Rodger of CA 6:59PM October 17, 2012

Waiting to collect benefits sounds like a good idea except for men who don't have as long a life span. My father and uncles passed at around age 75, I have cancer at 63 so my prognosis isn't good either. I chose to retire at 62 but we have less than $5k total debt (for a car) and that will be paid within a year. People with no debt can survive well on low incomes because we don't pay tax any more and have few monthly payments and and grown kids. Get rid of debt before you retire if possible.

Bill C of VA 4:05PM October 16, 2012

if everybody including politicans retired out of the same pot, they could fix ss in a heart beat

Gemp of OH 3:13PM October 16, 2012