Social Security is a critical component of the retirement financial strategy for many Americans, so before you begin taking it, you should consider three important questions. The answers may affect whether you make the most of this retirement income source.
- When to Start?
You have the choice of 1) starting benefits at age 62, 2) claiming them at your full retirement age, or 3) delaying payments until age 70. If you claim early, you can expect to receive a monthly benefit that will be lower than what you would have earned at full retirement. If you wait until age 70, you can expect to receive an even higher monthly benefit than you would have received if you had begun taking payments at your full retirement age. The decision of when to begin taking benefits may hinge on whether you need the income now or can wait, and whether you think your lifespan will be shorter or longer than the average American.
- Should I Continue to Work?
Work provides income, personal satisfaction, and may increase your Social Security benefits. However, if you begin taking benefits prior to your full retirement age and continue to work, your benefits will be reduced by $1 for every $2 in earnings above the prevailing annual limit ($19,560 in 2022). If you work during the year in which you attain full retirement age, your benefits will be reduced by $1 for every $3 in earnings over a different annual limit ($51,960 in 2022) until the month you reach full retirement age. After you attain your full retirement age, earned income no longer reduces benefit payments.
- How Can I Help To Maximize My Benefit?
The easiest way to help maximize your monthly Social Security benefit is to simply wait until you turn age 70 before receiving payments.
If you’re considering taking Social Security, make sure you do so in a way that fits your financial situation and that is best for your long-term retirement. Talk to us today if you have questions on how to do that.
This is for informational purposes only, does not constitute individual investment advice, and should not be relied upon as tax or legal advice. Please consult the appropriate professional regarding your individual circumstances.
Maximizing your Social Security Benefits assumes a foreknowledge of your date of death. If, as an example, you wait to claim a higher monthly benefit amount but predecease your average life expectancy, it would have been better to claim your benefits at an earlier age with reduced benefits.
Content regarding Social Security is not associated with or endorsed by the Social Security Administration or any other government agency.
Advisory services offered through Asset Strategy Advisors, LLC. (ASA). Securities offered through representatives licensed with Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Insurance offered through Asset Strategy Financial Group, Inc. (ASFG). ASFG and ASA are independent of CIS and are separate companies.
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