Deciding when to retire

Q: I was planning to retire from my practice at 65, but now that the age at which one can collect full Social Security benefits has increased, should I postpone my retirement?

A: Retirement ages changed with the Social Security Amendments of 1983. That information seemed irrelevant for many of us back then because we were so far from retirement. But it's taken on new importance as baby boomers near their retirement moments of truth. The simplest answer to your question is that anyone qualifying for Social Security benefits can retire with full benefits ("normal retirement age") when reaching the age indicated on the chart in the next column. The amount of full retirement benefit is determined by a formula using the average of the 35 years of highest covered salary.

You may retire before your normal retirement age, but doing so will reduce your monthly benefit. For most people, even with the early retirement reduction, the total dollar benefits paid over a lifetime should be similar regardless of whether they retire early.

The Social Security Administration Web site, http://ssa.gov, has details on these and other common retirement issues. One part of the site, http://ssa.gov/estimator, offers a way to calculate your likely retirement benefit.

You also can meet with a Social Security representative at one of the agency's local offices.

Answers to our readers' questions were provided by Dan Danford, MBA, CRSP, principal and chief executive officer of the Family Investment Center, an investment firm in St. Joseph, Missouri. Send your money management questions to medec@advanstar.com
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