Imagine if Goldilocks was planning her retirement: “this date is too early” and “this date is too late” but “this date is just right”!
Sweet retirement can’t come soon enough for some of us, but it’s important to know precisely when you should retire. When planning for retirement, understand that the amount of your retirement benefits depends on your age at retirement.
Too Early!
If you begin receiving benefits before your full retirement age, you’ll receive reduced benefits. You can retire as early as age 62, but this may result in a reduction of as much as 30%.
When you choose to retire early, the benefit is reduced 5/9 of 1% for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of 1% per month.
Too Late!
Starting to receive benefits after the normal retirement age may result in larger benefits. With delayed retirement credits, you can receive your largest benefit by retiring at age 70.
Delayed retirement credit is generally given for retirement after the normal retirement age. To receive full credit, you must be insured at your normal retirement age. No credit is given after age 69. If you retire before age 70, some of your delayed retirement credits will not be applied until the January after you start benefits. Delayed retirement credits increase a retiree’s benefits:
| Delayed retirement credit | |
| Year of birth | Credit per year |
| 1917-24 | 3.0% |
| 1925-26 | 3.5% |
| 1927-28 | 4.0% |
| 1929-30 | 4.5% |
| 1931-32 | 5.0% |
| 1933-34 | 5.5% |
| 1935-36 | 6.0% |
| 1937-38 | 6.5% |
| 1939-40 | 7.0% |
| 1941-42 | 7.5% |
| 1943 and later | 8.0% |
| Note: Persons born on January 1 of any year should refer to the previous year’s credit percentage. | |
Just Right!
SSA.gov provides a calculator where you can learn the effect of early or delayed retirement as a percentage of your primary insurance amount. If you choose a month and year for which you’d like to begin receiving benefits, the calculator will advise you on what you can expect.
For example, if you’re too early: “You choose to receive benefits 36 months before you reach your normal retirement age. Your benefit will be 80% of your primary insurance amount.” If you’re too late: “You choose to receive benefits 24 months after you reach your normal retirement age. Your benefit will be 116% of your primary insurance amount.” And if you’re just right: “You choose to receive benefits when you reach your normal retirement age. Your benefit will be 100% of your primary insurance amount.”
Retirement planning means much more than just stashing money under the mattress until you’re ready to spend. We have strategies that will help you decide how much to save and what you need to do. Contact us today at (540) 720-5656, and together we can determine the right time for you to begin living your retirement dream.
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Megan Jones joined the ILG Financial team in 2020 as marketing director. Megan and her husband live in Fredericksburg, VA with their German Short Haired Pointer, Gus. Megan is a graduate of Longwood University and holds a degree in communications. Megan is the oldest of Dave Lopez’s three children and not only enjoys working alongside her father, but also with her cousin, Chase, who joined the ILG Financial team in 2020 as an advisor. Megan is also a fully licensed Life, Health, and Annuity agent. When not at work, Megan enjoys sitting on the back porch with family and friends enjoying food and music.
Amy Anderson joined the ILG Financial team in 2023 as the client relations coordinator. Her responsibilities include scheduling of appointments, annual check-up notifications, and annuity and required minimum distribution assistance. She is a graduate of Harding University with a degree in Computer Information Systems. Amy and her husband have two children and she enjoys reading, crocheting, music and spending time with her family.
Terri Center joined the ILG Financial team in 2019 as client services manager. She handles client records, application processing, and gathering information to provide a professional and friendly experience with all of our clients. Terri is a graduate of Oakland University. She is married and has two children. She enjoys hiking, family time, and puzzle challenging video games. She also likes to share her creativity in her canvas paintings and sewing projects.
Jessica Carson joined the ILG Financial team in 2018 as an agent. Jessica and her husband have four children, two dogs, 3 barn cats, 5 chickens, and three parakeets. She indeed loves her children and pets! When not at work, Jessica enjoys playing the piano and cello as well as traveling and spending time outside with her family, hiking, fishing, and boating.
Chase Lopez joined the ILG Financial team in 2020 as an advisor and obtained his