Choosing the right time to begin claiming your Social Security will maximize the amount of money you will receive to supplement your retirement funds. The right strategy can lead to $100,000 or more in additional retirement income, said Wei-Yin Hu, director of financial research for Financial Engines, a Sunnyvale, Calif. registered investment advisor.
Determining the right strategy can be tricky and confusing especially if you are married, since there are over 8,000 ways a married couple can file for Social Security benefits. A recent study by Financial Engines found that most Americans overestimate their ability to make good Social Security claiming decisions and underestimate the complexity of deciding when to claim Social Security benefits.
“Deciding when to begin claiming Social Security benefits is one of the most important retirement planning decisions you can make, but it’s not easy,” he said.
Although many people begin claiming as soon as they reach age 62 or once they stop working, but most people will generally receive higher payments if they delay claiming, said Hu.
“Deferring the start date of your Social Security benefits can significantly increase the amount of payments. It’s the best deal for households seeking more annual income in retirement,” he said.
Although many Americans typically expect to retire at age 66, the brutal truth is that most retirees don’t stay on the job nearly that long. A recent Gallup Poll found the average age among retirees is closer to 62.