Question

Richard is a successful executive at a large company with headquarters in Houston, Texas. He celebrated his 58th birthday in the current year. Richard has worked with the company for more than 20 years. As a result, he has significant savings accumulated as well as a company pension. He is considering retiring from employment early at age 60. Even if he retires early, he can continue the company paid health insurance as a retiree until he qualifies for Medicare at age 65. He would like to evaluate his options for taking Social Security retirement benefits at age 62, at FRA, or at age 70. Based on his earning history, his Social Security statement shows that he will receive $2,850 per month at FRA. Inflation is expected to be 2.5% and his life expectancy is 93. He has asked you to do an analysis of differences in his monthly cash flow from Social Security at each age. What is the reduced monthly SS retirement benefit if Richard draws at age 62?

Answer 1

Realities :

1) Richard commended his 58th birthday celebration in year 2020, which implies he was conceived in year 1962 .

2) Early retirement for Richard , 60 years

3) His Medicare begins at 65 years, till then he will have organization's paid medical coverage.

4) Inflation @ 2.5% , Richard's future is 93years

5) At Full retirement age Richard will get $2850 p.m

Ans) Evaluation of Richard's choice for taking standardized savings at 62 or 70 years :-

Things to know :

According to gov's. FRA organizer, if Richard will begin his retirement benefits at age 62, his month to month advantage sum will be diminished by around 30 percent. The decrease for beginning advantages at age

63 is around 25 percent

64 is around 20 percent;

65 is about 13.3 percent; and

66 is about 6.7 percent

Along these lines, if Richard decides to get his FRA benefits at 62 years he will get $1945.125 every months while, on the off chance that he will decide to get FRA at 70 years or significantly following 67 years old he will get $2778.75.

It would best suit Richard in the event that he decides to get benefits at 70 years to get max. benefits.

Richard's Full Retirement age will be a long time since he was brought into the world after 1960 .