Category Family Budget

Delaying Social Security Could Increase Lifetime Income

For those who are nearing retirement age can increase their lifetime income if they can wait a bit to start drawing Social Security benefits.  It is between the ages of 55 to 64 when folks start thinking seriously about retirement.

Workers can start taking Social Security at age 62. But for those who can wait, the benefits go up.

“If you need Social Security early, take it – you’ve earned it,” said Virginia Reno with the National Academy of Social Insurance, a nonprofit organization based in Washington, D.C. “But waiting even a year or two can make a big difference in the long run. The extra benefits are there for life.”

Payments increase by 5 to 7 percent for each year of delay between ages 62 and 66, and by 8 percent for each year of delay between ages 66 and 70. The increases stop at age 70.

For someone who can wait until age 70 to take Social Security, the reward is a lifetime monthly benefit that is 76 percent higher than if taken at age 62.

For example, a worker who qualifies for a Social Security benefit of $750 at age 62 would receive $1,000 by waiting until full retirement age (66 for people born in 1943 to 1954). By waiting until age 70, the retiree would receive $1,320 a month.

The higher benefit would also be the basis for future inflation adjustments.

Around New York, only about one in three residents who are currently receiving Social Security retirement benefits waited until full retirement age to start their payments, according to the Social Security Administration.

Getting the most out of Social Security benefits becomes more important the longer retirees live, said Leticia Miranda, a policy adviser with the National Council of La Raza, a nonprofit that focuses on Hispanic issues, including retirement.

“You may be here longer than you think,” Miranda said.

About half of seniors aged 65 to 69 get most of their income from Social Security. Many have other assets or work part time. But for three out of four seniors in their 80s, Social Security is the main source of income.

Nationally, a woman who is 65 years old today can expect to live until she is 86. For men, it’s 84 years.

Another consideration is how the timing of benefits will affect a spouse’s income, Reno said.

“If you are the higher earner in a couple, delaying benefits not only means a higher benefit for you for the rest of your life,” she said. “It also means a higher benefit for your spouse if she or he outlives you in old age.”

In more than half of couples who are 65 today, one spouse will live beyond 90, she said.

But residents of nonmetropolitan areas  may have a harder time delaying their retirement.

“In rural areas there is often a challenge as folks move toward retirement,” said Deanna Sharpe, a personal finance professor at the University of Missouri. “They are more likely to face unemployment. Jobs are not as available. And when they are, they tend to pay less.”

Economic downturns can also affect when people decide to start receiving Social Security, Sharpe said.

“One of the coping mechanisms during the recent recession was to pick up Social Security at age 62, even if they might not have planned to do that before the recession,” she said.

Retirees need to make informed decisions, Sharpe said, but too often that doesn’t happen.

“We find in surveys of financial literacy that quite a large portion of folks don’t understand the basics,” she said. “That’s a concern.”

But retirees can easily find free or low-cost advice. Sharpe said many USDA Extension Service offices can provide information on retirement planning. She also recommended nonprofit organizations such as the National Endowment for Financial Counseling and Financial Education (www.nefe.org).

The Social Security Administration website (ssa.gov) has a calculator that allows workers to estimate their retirement earnings based on their own work records and estimated retirement age.

And the National Academy of Social Insurance has materials online about the impact of delaying Social Security benefits (www.nasi.org/WhenToTakeSocialSecurity).

With national discussions about Social Security frequently in the news, some workers may worry whether the system will be there when they need it. Sharpe said people should stay abreast of the issues. “That’s part of making an informed decision,” she said.

But Reno said that should not influence a personal decision about when to draw benefits.

“Social Security will be there if you wait,” she said. The system is fully financed for about the next two decades and is three-quarters financed thereafter, she said.

“Despite what you may hear, lawmakers have some good options to fix the system for the long haul,” she said.

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Tim Marema is editor of the Daily Yonder (www.dailyyonder.com), a national website that covers news about small cities and rural America.

Roberto Gallardo is an associate professor at the Mississippi State University Extension Service.

Support for the research and production of this article was provided by the National Academy of Social Insurance. The content of this article is solely the responsibility of the Daily Yonder, which is published by the Center for Rural Strategies, a nonprofit, nonpartisan organization based in Whitesburg, Ky.

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    Scrapbooking has been around for ages, but it has recently experienced a surge in popularity. People from all walks of life have discovered the joys of creating albums to showcase their treasured photos and keepsakes. But with all the elaborate scrapbooking techniques and myriad embellishments available, getting started can be intimidating.

    The truth is, anyone that can use scissors and glue can scrapbook. And you don’t have to spend ridiculous amounts of money to create attractive pages. With some basic supplies and a little imagination, you can create lovely scrapbooks that will be adored for years to come.

    What You Need

    You can get started scrapbooking on a small budget. Here are the things you’ll need.

    * An album – Scrapbooking albums come in all shapes and sizes. The most popular are 8 1/2″ x 11″ and 12″ x 12″. They can be found at most craft supply stores if you don’t have a scrapbooking supply store nearby.

    * Paper – Scrapbooking paper can be found in a variety of solid colors and patterns. This will be the basis for each page. You may also use scrapbooking paper for journaling and to create your own photo mats and embellishments.

    * Cutting tools – You can easily get by with just a good pair of scissors. But an Exacto knife might make photo cropping easier. And if you’re no good at cutting straight lines, you might want to invest in a paper cutter.

    * Adhesives – There are all sorts of adhesives one could use for scrapbooking. Glue sticks and double-sided tape are quite popular. Some scrapbookers also use rubber cement or glue dots for certain applications. But when you’re getting started, just use what you’re most comfortable with.

    * Photos – Beginning scrapbookers often start out with old photos that they’ve accumulated over the years. This makes for a nice, nostalgic album. Of course you can also take new pictures for your scrapbook. A digital camera and photo printer are two modern conveniences that make scrapbooking easier, but they are not necessities. Photos taken by a film camera work just as well.

    When purchasing scrapbooking supplies, it’s important to make sure they are acid-free. This will keep them from harming your priceless photos.

    Basic Techniques

    You don’t have to know a lot about scrapbooking techniques to create an attractive album. Just a few simple techniques will suffice.

    One of the first things many scrapbookers learn is how to mat photos. This can be accomplished by simply cutting a square or rectangle that is about a half inch longer and wider than the photo you want to mat. Then glue the photo to the center. To make a photo really stand out, double mat it by cutting out a shape a half inch longer and wider than the first mat, and center the matted photo on it.

    Journaling gives scrapbook pages a nice personal touch. Simply write a note about the photos on a page, telling what was happening or sharing your thoughts on the subject. Use paper that coordinates with the background, and be sure to write with an acid-free pen.

    Adding borders to your pages gives them a finished look. You can make them out of strips of coordinating scrapbook paper. You don’t have to border all four sides. A strip along the top, side or bottom will do. For easy embellishing, use some stickers.

    There’s no need to throw in the towel if you don’t have the time, money or know-how to create elaborate scrapbooks. Just start off simple, and learn new techniques as you go.

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