Could the Wrong Social Security Claiming Strategy Cost You $300,000?
Social Security isn't just an income stream that retired workers look forward to receiving during their golden years. For many, it's a financial foundation that makes up a good chunk of their annual income. The Social Security Administration (SSA) notes that 62% of elderly beneficiaries rely on their monthly stipend to account for at least half of their income. Meanwhile, an analysis from the Center on Budget and Policy Priorities estimates that without Social Security income, senior poverty rates would be almost five times as high (above 40%).
Given how important Social Security income is to a majority of seniors, your claiming decision (i.e., the age at which you decide to begin receiving Social Security benefits) can have a major and lasting impact on your ability to stay above the federal poverty line during retirement. While your earnings history and length of work history do have bearing on your monthly payment -- the SSA takes into account the average of your 35 highest-earning, inflation-adjusted years -- your claiming age can dramatically impact what you'll receive.
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Source: Fool.com