AARP recently rolled out a new feature on its website to help seniors determine when to begin collecting Social Security payments.
The interactive tool is designed to help seniors meet their financial goals as part of the AARP’s new 10-step “Ready for Retirement?” program.
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“Our research shows that many Boomers are worried about retirement because they don’t feel prepared,” said Jean Setzfand, Vice President of Financial Security at AARP. “With our new easy-to-use calculator and our ‘Ready for Retirement?’ resources, we want to help older Americans understand retirement as a life transition, visualize their goals, and take the steps needed to build retirement security.”
Coventry Patch points out that more than half of people who claimed Social Security retirement benefits in 2009 did so as soon as they became eligible at age 62. This was even though beneficiaries would decrease their lifetime retirement income by as much as eight percent each year, which they claimed benefits for before reaching full retirement age.
“Choosing to claim benefits early – or late – is a highly personal decision made all the more difficult by the weak economy,” said Setzfand. “With health, employment, lifestyle, and savings among the many variables to consider, no age is right for everyone. However, the later you decide to claim, the greater the potential benefits for you and your family. Our calculator helps people weigh the variables and make informed decisions about their circumstances.”
How the AARP Retirement Calculator Works
The AARP retirement calculator simplifies the complex considerations involved in retirement planning. Users input personal details such as age, health status, lifestyle choices, expected retirement age, and financial information. The tool then analyzes this data to project the benefits of different claiming ages.
For instance, claiming Social Security benefits at the earliest age of 62 can lead to a permanent reduction in monthly benefits by as much as 30% compared to waiting until full retirement age (67 for most people born after 1960). On the other hand, delaying benefits past full retirement age can increase your monthly payouts by 8% each year until age 70, maximizing your lifetime income significantly.
Case Studies and Examples
To illustrate the practical use of the AARP retirement calculator, consider the scenario of a person planning to retire early. If John, age 62, uses the calculator, he may find that claiming benefits immediately would result in $1,500 monthly. However, waiting until age 67 could increase his monthly benefits to $2,100, and delaying further to age 70 could boost his monthly income to approximately $2,640.
Strategic Considerations for Retirement Planning
Beyond just calculating benefit amounts, the AARP retirement calculator also helps users consider various factors such as health, employment status, and other income sources. These elements are critical as they affect the necessity for early benefits and the ability to sustain oneself without tapping into Social Security.
Do you think the AARP’s Social Security Benefits Calculator is helpful?
If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Newlin Disability.