Hi. Vince Oldre, certified financial planner. I’m here to talk about a question that we received about social security. The question was whether or not their social security will still grow if they’re deferring their social security, but are no longer working. They are 58 years old and they plan on retiring at age 62, but they want to defer their social security to their full retirement age. Or, for this example, they want to retire or take their social security at age 65. But the concern was if they stop retire … If they actually stop working, will their social security check grow because they’re supposed to get a bigger check if they wait until their full retirement age or until 65, instead of taking it at 62.
So, this particular person wanted to wait until age 65 because her check is going to be much larger. If you stop working, that doesn’t mean your social security check won’t grow until 65. What you shouldn’t do is keep working just because you think your social security is going to increase because your social security is made up of your 35-year earnings. So, when you think about your 35 years of doing it, they’re going to take that average of those 35 years. That’s a large average. If you have one or two years that might not really count towards your average, that might not impact social security that much.
Now, if you were, say, a stay-at-home parent and you have a lot of years where you didn’t have any earned income, that might impact what your social security payout would look like. Then those extra years might actually help benefit you. But if you have enough earnings history, then stopping or actually no longer working isn’t going to impact where your benefit will be that much. So, you don’t need to have any concerns about that.
If you have any other questions, please let us know. But the one thing I want you to keep in mind, if you are going to retire, there’s a couple of things that you need to keep in mind, especially if you’re going to retire early. Number one is making sure you have a retirement plan and income plan down. Number two, you have to think about what health care expenses might look like for you, especially if you’re going to retire before age 65 when Medicare can kick in.
Again, I appreciate the question. If there are any other questions you might have, feel free to reach out to us and we’ll make sure to answer your question.