Social Security and Your Retirement PlansThinking about retirement can bring to mind thoughts of travel, spending time with loved ones, and devoting yourself to your favorite pastimes.  For many people, their Social Security benefit will be an important piece of funding their future.  Here are some considerations about Social Security and your retirement plans.

Full Retirement Age

If you have worked and paid into the Social Security system, you are going to be eligible to first draw your Social Security benefit at age 62.  However, taking your payment at this age is not considered to be a “full retirement age”.  Your full retirement age is the age when can get your complete benefit from Social Security.  If you were born between 1943 and 1954 full retirement age is 66.  However, if you were born after 1960, the age is 67.  What this means is that if you decide to take your payment before reaching the designated age, your benefit will be permanently reduced to less than what you would get at your full retirement age.

Your Age When You Collect

According to the Social Security Administration, if your full retirement age is 67, your Social Security benefit is reduced by approximately 30 percent if you start collecting at 62, approximately 25 percent if you start collecting at 63, approximately 20 percent if you start collecting at 64, approximately 13.3 percent if you start collecting at 65, and approximately 6.7 percent if you start collecting at 66.

Social Security recipients have the option to wait up to the age of 70 to draw their benefit.   Waiting can be beneficial because each year you wait beyond your full retirement age the more your benefit will be.  Waiting until after your full retirement age may also result in your being eligible for delayed retirement credits which will increase your monthly benefits.

Other Factors

Determining when to draw your Social Security benefit will depend on numerous factors such as your other sources of retirement income, health, marital status, and current financial needs.  It may be that you have a healthy 401(k) or defined pension benefit and can afford to delay receiving your Social Security income.  In that case, waiting until you are 70 could be in your best interest.  However, it may also be that you have some financial and health challenges which require that you have retirement income sooner rather than later.  Additionally, you may also be considering your survivors when you decide to receive your Social Security benefit.  Therefore, another factor may be how the timing of drawing your benefit will impact your spouse and dependents in the event of your death.

We understand the importance of sound retirement planning and can help you make informed decisions regarding your Social Security benefit.  Please contact us online or by phone if we may be of assistance.

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