In Section 4C we considered the problem of a planned retirement income under the assumption that this needs to be financed by investment into a retirement account. However income can have other forms, and we all pay FICA during our working life so we can take out Social Security when we retire.

a) Use the Social Security Quick Calculator at https://www.ssa.gov/oact/quickcalc/ to determine the monthly earnings (in todays dollars) of someone born on June 30th 1960 whose income has been $50,000 per year, and who plans on retiring when they reach their full retirement age of 67 - in July 2027.

-Your estimated monthly benefit amount, beginning at age 67 and 1 month in 2027, is $1,629.00

b) However a person may choose to retire before their full retirement age, although there is a penalty for doing so. Use https://www.ssa.gov/planners/retire/1960.html to determine how much this person would receive if they choose to receive Social Security Benefits at the minimum possible age of 62.

-Your estimated monthly benefit amount, beginning at age 62 and 1 month in 2022, is $1,078.00

-And you are the: Wage Earner, the Retirement Benefit you will receive is reduced to 70.4%

c) How much will the person have received in benefits when they reach the age of 70

if i) they retire at 67,

and ii) they retire at age 62?

d) Repeat (c) for age 80.

e) Is it better to claim the benefit at the earliest possible time rather than to wait until full retirement age? Explain your reasoning.