Key Questions to Ask Before Taking Social Security Benefits

Key Questions to Ask Before Taking Social Security Benefits

Considering taking Social Security benefits? Make sure you're prepared by asking yourself these three key questions. Understand your benefit amount, consider how your age will affect payments, and have a backup plan for potential benefit cuts in the future. By addressing these critical questions, you can better navigate the complexities of Social Security and ensure a more secure retirement.

1. Do you have a rough idea of your benefit amount?

• Knowing how much you can expect to receive from Social Security will make it easier to gauge whether your savings are enough to retire comfortably.
• Retiring on benefits alone is incredibly difficult, considering the average retiree only collects around $1,900 per month, as of April 2024.
• If you're not sure of your benefit amount, you can check your Social Security statements through your online mySocialSecurity account.

2. Do you know how your age will affect your payments?

• The estimate from your statements is the amount you'll collect at your full retirement age (FRA), which is between ages 66 and 67, depending on your birth year.
• By delaying benefits past your FRA (up to age 70), you'll collect a bonus of at least 24% per month on top of your full benefit amount.
• But to avoid any unpleasant surprises, it's important to understand how your age will affect your payments before you begin claiming.

3. Do you have a backup plan if benefits face cuts in the future?

• It's no secret that Social Security is facing challenges, and there's a chance that benefit cuts could be on the horizon.
• The program is funded primarily by payroll taxes, but in recent years, it's been paying out more in benefits than it's receiving in income.
• If Congress can't find a solution to the program's cash shortage by 2035, benefits could be cut by close to 20%.