Finance Q&A: When Should I Start Collecting Social Security?
- Friday, February 19, 2010
Editor's Note: Do you have a question about your finances? Crosswalk.com welcomes financial columnist, Deborah Nayrocker. Deborah will be answering selected readers' questions in her monthly column. To submit your question, email us at: email@example.com.
Next year I'll turn 62 years of age. I'm thinking about retiring and collecting Social Security benefits when I turn 62, instead of waiting till I'm older. My husband is still working. Should I go ahead and get my benefits early or wait? -- Carol
Consider this: Wall Street Journal reported that two years ago the oldest of the baby boomers turned 62 and many of them started claiming their Social Security benefits. They thought their government benefits, 401(k)s and other investments in the market would be enough for them live on. After the market meltdown, some of them saw the need to return to work.
Retirees who start to collect Social Security benefits early at age 62 usually receive 25% less in benefits than if they delay to claim benefits until their full retirement age. To maximize your benefits, it's better to wait.
Early retirement age (62): Receive $750 per month
Full retirement age (66): Receive $1,000 per month
For more information about your options, go to www.socialsecurity.gov.
My car is on its last leg (or tire). Should I lease or buy a new car? What are the advantages and disadvantages? -- Renae
Consider the monthly payments you can afford and what your needs are.
If you want lower monthly payments for a new car, you may want to lease, since they are usually lower than car loan payments. You're basically paying for the depreciation during the lease period. Leasing a car is like renting a car, and you must return it when the lease ends (usually 2-4 years), unless you opt to buy the car. If you plan to buy it when the lease expires, you usually pay considerably more than if you had bought it originally.
Early termination charges can be quite costly. And if you drive many miles a year, or you want to keep a car for many years, leasing probably isn't the way to go. Most leases set a limit on miles you can drive, charging 10 to 15 cents per mile for going over the limit.
Up-front car costs if you lease can include the first month's car payment, a capitalized cost reduction (comparable to a down payment), a refundable security deposit, taxes, registration, and other fees.
Should you decide to buy a car, you own the vehicle, not the leasing company. If you take out a car loan, at the end of the loan term you have no further payments. Up-front costs to buy are the total cash price or down payment, taxes, registration, and other fees.
When doing your research for the car that's best for you, check with your car insurer how much it will cost to insure. Insurance rates can vary, depending on your car make and model. These rates should be factored in along with your monthly payment costs, as well.
Copyright (c) 2010 Deborah Nayrocker. All rights reserved. Permission to reprint required.
February 22, 2010
Deborah Nayrocker is the author of The Art of Debt-Free Living and the popular Bible study Living a Balanced Financial Life. She is an award-winning writer and columnist. Her Web site is www.artofdebt-freeliving.com.
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