Rewards
Social Security
Part of your paycheck has been paying into Social Security for most of your life. Now it’s time to reap the benefits of the money you have paid into it.
In short, Social Security is like a fixed annuity. It is a government run program that replaces a portion of your pre-retirement earnings in the form of guaranteed income for life. If you’ve paid into Social Security for at least ten years (which you do through salary withholding in your taxes) then you qualify for retirement benefits in the form of monthly checks. The amount of this payment depends on your AIME, or average indexed monthly earnings during your 35 highest-earning years.
–––
Though this is a well known program, it can be complicated to know when you should claim your benefits. The amount of your monthly payment is dependent on when you decide to claim. We have certified professionals prepared to show you when, and how, you should file, based on your unique retirement goals. Here’s a breakdown of how the age you claim affects your payments.
See examples below of the social security we can help you with.
-
Age 62
Your Social Security benefits will be reduced by 30% if you withdraw at age 62.
-
Age 64
Your Social Security benefits will be reduced by 20% if you withdraw at age 64.
-
Full Retirement Age = 67
If you were able to wait until Age 67, you receive full benefits from your Social Security.
-
Age 70
By deferring your benefits until Age 70, you can actually increase them by 24%!
TOP ADVICE:
Be smart about when you claim your benefits by analyzing your financial situation, goals, and health.
-
No one knows, including even your local Congress representative or Senator. So it’s important to make sure you maximize your benefits, and create a resilient plan that will leave you in great shape even if there are adjustments to Social Security down the line.
-
If you have passed your FRA (66 or 67) then you can work as much as you want and still receive your benefits. If you’re younger than your FRA, however, and you pass a certain income threshold, your benefits will be reduced and redistributed later.
-
Yes! Your benefits undergo an annual cost of living adjustment (COLA). This doesn’t mean that you should rely entirely on your social security to manage rising costs, however. Make sure to diversify your income sources to fully protect yourself.
-
Claiming at 70 gets you the highest annual amount, but you miss out on previous earnings that you could be reinvesting to maximize your benefits. Seriously consider your health when choosing to wait.
RECENTLY IN THE NEWS
“Retirement savings aren’t what they used to be years ago.”
— Read full article at New York Times >
“There’s never been a better time to get your retirement accounts in order.”
— Read full article at CNBC >
