It’s possible to make a significant error by assuming the wrong age.
In order to receive your basic Social Security income, how old must you be? If you’re expecting to obtain it at an earlier age than you actually can, you’re probably mistaken.
In fact, a recent survey by Nationwide found that people of all ages expected to be able to claim their full retirement payout well before it was really available. When it comes to anticipating when benefits will begin, one demographic group was the most inaccurate.
Most Americans believe they can begin claiming their full Social Security benefits at this point in the year.
The average age at which Americans of all ages believe that they can claim their normal Social Security payments is 61 years old, according to a survey by the firm Nationwide.” Others believe they will be able to get the full benefits at an earlier age. The following is a breakdown of when each demographic group thinks they are eligible for Social Security:
- Baby boomers assume that retirement benefits begin to accrue at the age of 64.
- Gen X expects retirees to receive it at the age of 59.
- Many millennials believe that they can get their full Social Security payment at the age of 52.
In actuality, all of these guesses are incorrect, even if baby boomers are the most accurate. While both Gen X and millennials are incorrect in their estimation, they both believe seniors will be able to get the full benefit of their Social Security retirement income prior to the time when it is available.
The millennial generation has made the most erroneous assumption, estimating their retirement age at more than a decade younger than it is.
Social Security benefits are available at a certain point in time, and this is the truth.
So, what is the correct age to receive your first Social Security check if everyone else is wrong?
How old you are has a lot to do with it. As a result, retirees must now wait until between 66 and four months and age 67 in order to get a basic payout that is not lowered by early filing penalties. Previously, FRA was 65.
Of course, retirees can collect benefits prior to their full retirement age. But they can’t start as early as Generation X and millennials expect. It’s not until the age of 62 that you can start receiving retirement benefits.
As a result, a monthly payout would be much less than what retirees would receive when they reach their full retirement age. To put it another way, if your FRA is set at age 67, claiming Social Security benefits at the age of 62 will reduce monthly income by 30 percent.
If you underestimate your FRA, you run the risk of significant consequences.
As a result, underestimating when a regular Social Security payout will be made available might be an expensive error.
While the typical benefit retirees receive is calculated using their lifetime earnings as a percentage, this percentage isn’t particularly high because retirement benefits are only intended to replace about 40% of preretirement income.
It’s impossible to survive on even the minimum benefit. And if you think it’s going to be available very early, you could end up with a huge discount that leaves you broke. If you’re planning to retire at a certain age and discover that you won’t be eligible for Social Security benefits until years later, you may find yourself in a predicament.
In order to avoid relying on Social Security benefits that never arrive, or failing to make the most strategic option about when to begin receiving benefits, it’s important to know your complete retirement age.
For this reason, it is important to know your entire retirement age as well as how your age when you begin receiving checks influences your monthly income. You can only make the appropriate decisions about retirement accounts if you are aware of these realities.