Early Retirement Financial Impact

The Washington Post recently published a story about the strategic advantages to delaying Social Security retirement benefits.  If you’re sixty-two and you choose to wait to collect payments, the 2023 8.7% increase will be factored into your total eligibility. That sum amount is compounded year over year which means that your payout will be much larger at 67 than it would be at 62. The total is compounded until the age of 70 so there is no benefit to waiting long than that. 

 

Another benefit to waiting is the potential tax savings. It may be a surprise to learn that you must pay taxes on early retirement benefits, but it’s true. If you choose to wait to collect, it means that your benefits will be subject to tax via a lump sum rather than smaller payments. In the worst cases, nearly 85% of benefits are subject to taxes according to the Washington Post. 

 

10/27/2022