Three Key Questions to Answer Before Taking Social Security
Social Security is one of many factors to consider as part of your financial planning strategy. There are financial implications to consider regarding the decision about when to start benefits. The answers to the 3 questions below may affect whether you make the most of this retirement income source.
When to Start? You Have the Choice of...
- Starting benefits at age 62
- Claiming benefits at your full retirement age (FRA)
- Delaying benefits until age 70
If you claim early, you can expect to receive a monthly payment that will be significantly lower than what you would have earned at your FRA. If you wait until age 70, you can expect to receive a significantly higher monthly benefit - 24% or more - than you would have received if you had begun taking payments at your FRA. The decision of when to begin taking benefits may hinge on whether you need the income now or can wait.
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 FRA and continue to work, your benefits will be reduced by $1 for every $2 in earnings above the prevailing annual limit. If you work during the year in which you attain FRA, your benefits will be reduced by $1 for every $3 in earnings over a higher annual limit until the month you reach FRA. After you attain your FRA, earned income no longer reduces benefit payments.1
How Can I Maximize My Benefit?
The easiest way to maximize your monthly Social Security benefit is to simply wait until you turn age 70 before receiving payments.
There are many important factors and circumstances to consider before you decide to start taking Social Security. If you have questions on Social Security or have other financial planning needs, we encourage you to Contact Us to speak with a financial advisor.
Source & Disclosure
Social Security Administration, 2018
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes.