We discussed the question of which retirement income account to tap first last time, now question 4 -
When to take social security?
This is a critical question and one that is (rightly) receiving more attention each year in the financial press. Social Security benefits can be taken as early as age 62. Waiting until your full retirement age of 66 and two months, (67 if born in 1960 or later) results in a benefit that is about 30% percent higher. Waiting until age 70 adds roughly another 32% to the benefit. Not only are benefits higher but any cost of living increases will be higher as they are based on the higher benefit amounts.
For those who are working, any income over $16,920 (for 2018) will result in a $1 reduction in your benefit for every $2 in income over that amount. This restriction goes away once you reach the FRA age.
Additionally, there are various claiming strategies for married couples that can work well, depending on your situation, for example, this article discusses 4 unusual ways to boost social security benefits.
Please see question 5 in our next blog post.
When to take social security?
This is a critical question and one that is (rightly) receiving more attention each year in the financial press. Social Security benefits can be taken as early as age 62. Waiting until your full retirement age of 66 and two months, (67 if born in 1960 or later) results in a benefit that is about 30% percent higher. Waiting until age 70 adds roughly another 32% to the benefit. Not only are benefits higher but any cost of living increases will be higher as they are based on the higher benefit amounts.
For those who are working, any income over $16,920 (for 2018) will result in a $1 reduction in your benefit for every $2 in income over that amount. This restriction goes away once you reach the FRA age.
Additionally, there are various claiming strategies for married couples that can work well, depending on your situation, for example, this article discusses 4 unusual ways to boost social security benefits.
Please see question 5 in our next blog post.
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