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Claiming Early: If you opt to take your benefits early—at age 62 for example—you face a reduction in monthly checks, which can be as steep as 30%.
Delaying Benefits: Conversely, delaying benefits until age 70 increases your monthly payments by 8% per year, plus further adjustments for inflation.
This decision sets the stage for the financial fates of Pat and Nancy, who despite having similar financial backgrounds, adopt strikingly different approaches.
The Example of Pat and Nancy
Both Pat and Nancy have:
Retirement Age: 62
Savings: $1 million
Monthly Spending Needs: $6,000
Career Earnings: Approximately $90,000 a year
Their PIA is estimated at $234 per month at full retirement age.