Donald C. Reutemann CFP®, RPA

(518) 688-2223

Retirement Read Time: 3 min

Three Key Questions to Answer Before Taking Social Security

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.

  1. 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.
  2. 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.1
  3. 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.

1. SSA.gov, 2022

The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG  Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite.

Share |
 

Related Content

Savings and Cash Flow

Savings and Cash Flow

Savings is a critical tool to ensure positive cash flow in your personal finances.

New Retirement Contribution Limits for 2023

New Retirement Contribution Limits for 2023

A look at the new, record-high retirement contribution limits from the IRS.

Behavioral Finance

Behavioral Finance

An amusing and whimsical look at behavioral finance best practices for investors.

 

Have A Question About This Topic?







Thank you! Oops!

The Business Cycle

Understanding the economy's cycles can help put current business conditions in better perspective.

Not Just Equal Pay, Equal Job Security

While this may feel like a golden age for the LGBTQ community—with the affirmation of marriage equality and a cultural shift embracing diversity—these successes may distract...

Starting a Roth IRA for a Teen

This early financial decision could prove helpful over time.

View all articles

Assess Your Life Insurance Needs

This calculator estimates how much life insurance you would need to meet your family's needs if you were to die prematurely.

What Is My Life Expectancy?

Estimate how many years you may need retirement assets or how long to provide income to a surviving spouse or children.

My Retirement Savings

Estimate how long your retirement savings may last using various monthly cash flow rates.

View all calculators

5 Smart Investing Strategies

There are some smart strategies that may help you pursue your investment objectives

Protecting Those Who Matter Most

The importance of life insurance, how it works, and how much coverage you need.

Your Cash Flow Statement

A presentation about managing money: using it, saving it, and even getting credit.

View all presentations

Behavioral Finance

An amusing and whimsical look at behavioral finance best practices for investors.

The Junk Drawer Approach to Investing

It's easy to let investments accumulate like old receipts in a junk drawer.

Jane Bond: Infiltrating the Market

Agent Jane Bond is on the case, cracking the code on bonds.

View all videos