When anticipating retirement, you may think of the first work-free years of pursuing hobbies or traveling. However, your years in retirement may be longer than you think. Knowing when to claim benefits can give you a better chance of making your retirement money last.
Here are five things you should know:
1. Full Retirement Age doesn’t mean 65
Your Full Retirement Age (FRA) depends on when you were born:
2. Social Security is not a given
You have to work (enough) to earn it. Once you earn it, your family can also receive benefits based on your earnings.
3. Drawing Social Security early may not be the best
You can start before your Full Retirement Age, but doing so will mean a reduction in your amount. Delaying your benefits lets you collect more.*
If you start at age:
4. Everyone doesn’t earn the same
What you made won’t be what you earn.
Social Security will not replace your current wages. However, it should be part of your overall retirement strategy.
Your Benefit:
- Is based on a three-part calculation and an average of the best 35 ~ years of your earnings
- Can be increased to reflect cost of living adjustments, 2.3% average since 2000
- May be decreased if you are still working or if you are entitled to a government pension
- Up to 85% of your benefit may be subject to income tax
*Annual replacement rates in 2016 for retired worker, age 66. Source: 2016 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, 2016 Table V. C7.
Source: www.socialsecurity.gov
5. Spouses can take a team approach to maximize benefits
An individual earner can extend benefits to his or her spouse—to add to his or her own earned benefits or to use alone. How much each spouse earned and their anticipated life expectancy may help determine how and when to take Social Security.
Download the PDF infographic here.*
Are you curious to see where you stand? Test your maximized Social Security strategy here!
*Note: This information is provided for overview or general educational purposes only. This is not intended as tax advice.
Registered Representative with and securities and advisory services offered through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN Insurance Agency), member FINRA/SIPC
About Dave
Dave Coen is a Financial Advisor with SageView Advisory and the CEO of College Planning America. Along with his financial industry experience, he is a College Planning Specialist and has served on the advisory board of a national College Planning training organization. He works closely with individuals and families to provide them comprehensive financial planning that addresses all elements of their financial picture. Learn more by connecting with Dave on LinkedIn.
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Registered Representative with and securities offered through Cetera Advisor Networks LLC (doing insurance business in CA as CFGAN insurance agency), Member FINRA/SIPC. Cetera is under separate ownership from any other named entity. CA insurance license #0G82578
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