The director of the Social Security Administration brought some indispensable advice to Manatee County this week during his brief visit: Americans should initiate a “hard conversation with their spouse” about the age of retirement and the date to apply for Social Security benefits.
Commissioner Michael J. Astrue visited Bradenton along with Rep. Vern Buchanan, whose 13th Congressional District is home to almost 211,000 Social Security recipients. As a member of the House Ways and Means Committee, Buchanan is responsible for legislation that governs entitlement programs.
In a meeting with the Herald Editorial Board, Astrue expressed concern that Americans are not fully engaged in learning all of the rules surrounding Social Security benefits and may pursue a course of action detrimental to their long-term future.
As the baby boom generation swells the ranks of beneficiaries, they should be fully informed about their entitlement prospects. The agency offers an invaluable online tool called the Retirement Estimator, which provides specifics for each individual depending on a person’s earnings record and other circumstances. By entering personal information into the website, the agency provides an estimate of monthly payments.
The critical decision is when to start receiving benefits. The amount differs greatly. Initial benefits set the base for the remainder of a recipient’s life. Early recipients receive smaller checks over a longer period while applicants who wait for full retirement age or later get larger amounts. But the system is designed to dole out equal amounts over time based on life expectancy.
There’s the rub -- guessing a life span, based on individual health and family longevity. And then adding other considerations into a decision, such as savings accounts, pensions, annuities and other income, current and future cash requirements, and spouse and family circumstances.
The key is planning for the long term. Astrue cautioned that Americans are conditioned to retire early, a tradition that dates back decades when life expectancies were shorter than today.
Statistics compiled by the agency indicate men age 65 today can expect to live another 18 years on average while women would average an additional 20 years. But a fourth of those 65-year-olds will surpass age 90. The Social Security website contains a “life expectancy calculator” so Americans can make more informed decisions.
If your parents lived into their 80s and 90s, an individual may want to delay benefits. If your health is poor, early benefits might be best.
For Americans born from 1943-1954, the full retirement age is 66. Should such a baby boomer begin receiving Social Security at age 62, the monthly check would be reduced by 25 percent. Should that person wait until age 70, the rate would be 32 percent higher.
Assuming a $1,000 monthly check at full retirement age, the early beneficiary would get $750 while the older one would receive $1,320 a month -- wide variations to consider.
The agency’s website -- www.socialsecurity.gov -- contains a wealth of additional information. Commissioner Astrue offers sound advice. Detailed information is vital to decision-making.