How long will you be here? None of us want to talk about this, but we need to in order to make good choices. The Social Security Administration has a Life Expectancy Calculator that can give you a rough idea, but you will also need to consider your health history, family history, and your lifestyle.
Why do we need to think about this? Because life expectancy plays a big part in deciding when to apply for Social Security benefits. If your life expectancy is 70, you may start collecting as soon as possible. If your life expectancy is 90, you may want to wait so that you have the highest benefit possible in your later years.
Let’s look at the chart.
If you begin collecting at 62, you will collect $18,000 per year or $1,500 per month for the rest of your life. If you begin collecting at Full Retirement Age (FRA), you will collect $24,240 per year or $2,020 per month. And if you begin collecting at age 70 you will collect $32,520 per year or $2,710. The difference is more than $1,200 per month. That can mean a big lifestyle change.
Many people would like to wait to apply for benefits, but often cannot or don’t want to. You may have lost your job or been unable to work for health reasons. You may be caring for aging parents or helping your children through school and need the income. Some want to spend more time doing the things they enjoy while they are still able. Others may just want the extra income now. There’s no one answer or reason; there’s no right or wrong; there’s only what is best for you.
My mother is 80, my grandfather lived to 91, and my great-grandmother died at 94. I may be here for a long time and need to consider that. I also would like to have more free time to enjoy myself. It’s a personal decision. With this information, I know what my options are and can make the best choice for me. Hopefully, you can too.