If you’re like most people, you see Social Security as retirement income you’re working hard to earn, and you would like to receive it as soon as possible — in many cases, as soon as you become eligible at age 62. But did you know taking your Social Security benefits early results in a permanent reduction of your monthly income? 

Consider this: Individuals retiring at age 65 today can expect to live, on average, another 13 or more years and be paid an average annual Social Security income of just $15,936. 

Whether your retirement is a few months away or many years down the road, use the following tips now to help ensure you get the most from your retirement benefits and keep the lifestyle you desire in later years. 

Plan Now to Delay Your Benefits.

You know you can claim Social Security benefits beginning at age 62, but did you know doing so can reduce your monthly income amount by as much as 30 percent? This reduction is permanent for retirement years. 

Delaying your receipt of Social Security benefits, on the other hand, can dramatically increase your total lifetime benefit. For every year beyond your full retirement age (age 66 or 67 depending on when you were born) that you delay your benefit, your total Social Security benefit is increased by eight percent. This increase continues up to age 70 for a total increase of 24 to 32 percent depending on your full retirement age.

Does This Mean I'll Have to Keep Working?

Not necessarily. With some retirement preparation, you may be able to stop working and use money from other investments as income while you wait to draw your Social Security. The key is to create your roadmap to retirement as early as possible to help you prepare for your income needs. By viewing your Social Security benefits as a retirement asset similar to a 401(k) or pension plan, an IRA or even long-term savings, you can include it as just another piece of a larger income pie. 

I Don't Think I Can Wait That Long.

There are a variety of reasons why waiting until age 70 to receive Social Security benefits might seem too long for you and your spouse. In some cases — a shorter life expectancy due to illness, lack of confidence in the system — waiting simply isn’t a reasonable solution and benefits should be taken as soon as you need. 

Other reasons, such as financial challenges, may be able to be addressed, and you may be able to find a way to delay benefits. You’ll need to begin by asking some important questions: 

• When do my spouse and I plan to stop working? 
• What will our income need to be between ages 62 and 67? 
• What will our income need to be between ages 66 and 70? 
• What will our income need to be at age 70 and beyond? 
• What other sources of income already exist? 
• What is our risk tolerance for investments we could make now to help us reach our goals later? 

You're Not Alone!

When all the options seem overwhelming, lean on your team of financial professionals — your Farm Bureau insurance agent, attorney, estate planner, etc. They can help you understand the options available to you and can even assist you in purchasing products like an IRA, annuity or life insurance to complete your retirement strategy. 

Your retirement will be unique to you, but getting the most from your retirement benefits starts with early preparation. 

Sources:

• U.S. Department of Health and Human Services, www.cdc.gov, visited June 3, 2015 
• Social Security Administration, www.ssa.gov, visited March 18, 2015