Social Security retirement age likely to rise
February 16th, 2011
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- Retirement Independence
- Group Calls For Social Security Reform
If you’re looking forward to retirement the right age from a Social Security perspective varies. For those born in 1937 then full retirement benefits are available from the Social Security system at age 65 — but if you were born after 1960 then the benchmark date is your 67th birthday.
The full retirement dates are not set in stone and when to retire can be a complex question: If you start drawing benefits before your full retirement kicks in then you will get less than would otherwise be available for the rest of your life. If you defer retirement then you can more each month.
“As a general rule,” says the government, “early or late retirement will give you about the same total Social Security benefits over your lifetime. If you retire early, the monthly benefit amounts will be smaller to take into account the longer period you will receive them. If you retire late, you will get benefits for a shorter period of time but the monthly amounts will be larger to make up for the months when you did not receive anything.
“There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit is reduced. Each person’s situation is different, so remember that, if you delay your benefits until after full retirement age, you may be eligible for delayed retirement credits that would increase your monthly benefit.”
Increasingly, however, there is a growing sense that the full retirement date is about to change. The change will likely not impact those who will retire in the next few years or those who currently collect Social Security but a later retirement date for younger citizens is plainly in the works.
According to the Eufaula Tribune, Sen. Richard Shelby (R-AL) predicted “that older individuals would receive their full benefits. He couldn’t offer the same message to younger attendees.”
“If you’re a young person…you better look at the math,” he said.
Shelby — now Chairman of the Senate Committee on Banking, Housing and Urban Affairs — said lawmakers should consider increasing the retirement age to help Social Security survive, according to the paper.
“And we shouldn’t put it off until 2025,” he said. “It wouldn’t kill anybody. It might hurt a little bit.”
What a change in Social Security benefits would do is change retirement planning for millions of people. That means everyone needs to look at their future income after work. Will you have enough? If not, would a reverse mortgage make sense to lower monthly cash costs and allow you to live in place?
It may be that a reduction in the Social Security retirement age will spur additional interest in reverse loan programs. For details regarding home equity conversion mortgages speak with lenders and get independent advice from fee-only financial planners and attorneys who specialize in elder law.