Here’s a quick recap to refresh your memory:
59-1/2 – Age at which you can access retirement funds without 10% early withdrawal penalty
62 – Age at which you can begin to draw social security
65 – Age at which Medicare begins
67- Full retirement age for those born after 1960 (considered full social security check)
70 – Age at which social security benefits max out
75 – Age at which mandatory RMDs from tax advantaged accounts must begin for those born after 1960.
Every year around my birthday, I review my social security earnings statement. This year, a new question popped up on the screen asking if I’d like to apply for social security. It caught me off-guard for a minute, but yes, this particular trip around the sun means I could begin to draw social security if I wanted to. As with my pension calculator, once I reached the “magic age”, the SSA financial calculators were specific to my circumstances. Very interesting to experiment with different scenarios. Remember, there’s no right or wrong age to claim social security benefits. Every person’s financial situation is unique. Consult with your financial advisor and do what works best for you.
Many of my teacher friends worked until 62 and then retired – drawing both pension and social security simultaneously. It’s simple economics, really. A teacher’s pension typically only replaces about half of their previous income. Combined with social security, it means they can replace 75% or more of their previous teacher salary. If this “income floor” matches their basic monthly obligations, then a lot of financial stress can be alleviated. This seems to be true whether they are single, married, divorced or widowed. Likewise, our original retirement plan also called for me to claim social security at age 62. Four years into retirement (we retired at 57/58) and looking at our big picture holistically, it now makes more sense for me to delay claiming it for a while. Just knowing that the benefit is available to access when needed provides a certain peace of mind.
Other fun benefits of reaching this milestone birthday:
My birthday gift to myself was a senior lifetime America the Beautiful National Park Pass for $80.00.
I’m eligible for an exemption on the school tax portion of my property bill starting in 2027. (Over $5k savings/year.)
For ages 62-64, Georgia exempts up to $35,000 of most kinds of retirement income from state income tax. The number increases to $65,000 at age 65. Note that Georgia does NOT tax social security income. A nice perk at tax time next year!
I still don’t see myself as a senior adult when I look in the mirror. However, I’ll gladly call myself one to take advantage of the discounts and benefits.
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