SOCIAL SECURITY HOW TO MAXIMIZE YOUR RETIREMENT INCOME BENEFITS FROM SOCIAL SECURITY
IF YOU HAVE ANY QUESTIONS PLEASE REACH OUT TO US!
FOREWORD Thank you for your time and interest. This booklet was created as an educational guide with the intent to bring you greater clarity and understanding of the financial decisions you make. If you need more information on a subject discussed, we welcome your email and will attempt to get you the answers you need. Please be mindful as you read this; everyone’s financial situation is different. So any product or solution must match your specific financial picture. We strongly recommend you consult with a highly-rated professional about every financial decision you make. Because, just as not all products are created equal, neither are all financial professionals, and the difference in knowledge and advice can be substantial from one advisor to another. Working with a highly knowledgeable, independent, well-rated professional can make all the difference when it comes to the results you achieve. If you are ready to explore your retirement options and want some help cutting through the clutter and jargon, visit www.CertifiedSafeMoney.com for unbiased information and to connect with professionals who can answer all of your most pressing questions. If you ever have feedback related to this booklet or concerns about your retirement income and financial security, please email us at [email protected] We’re happy to help. CSM202103SOCIALSEC 3 [email protected] www.certifiedsafemoney.com
HOW TO NARROW DOWN THE SOCIAL SECURITY BENEFIT STRATEGY FOR YOU For many Americans, Social Security is the cornerstone of a safe retirement planning strategy. However, there are thousands of different ways to file for these benefits. Depending on which option you choose, you could end up receiving (or missing out on) an extra $100,000 or more of retirement income. With that in mind, knowing how to maximize your retirement income benefits from Social Security is a crucial part of financial planning for retirement. Many people don’t realize that their most valuable retirement asset may not be their 401(k), IRA, or other savings, or even their house, but their Social Security income. This is because Social Security could end up paying you a monthly benefit for the rest of your life —which could amount to hundreds of thousands of dollars. How and when you file for Social Security can significantly impact your total benefit received; we recommend speaking with a safe money retirement financial advisor while exploring your options. A BRIEF HISTORY OF SOCIAL SECURITY The Social Security Act was signed into law by President Theodore Roosevelt in 1935. This act essentially created a social insurance program designed for paying retired workers who were age 65 and older a continuing income after they retired. According to President Roosevelt: “We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.” The initial benefits from Social Security were paid out to recipients as just one single lump sum. Then, in January 1940, the payment of monthly Social Security income began. These benefits were for retired workers and their aged spouses or widow(er)s, children under 18, and even their aging parents. In late January 1940, the first monthly Social Security retirement check was paid to Ida May Fuller, age 65, who worked as a legal secretary. Ida May lived to be 100 years old, and she continued to collect Social Security retirement benefits for the rest of her lifetime. Today, Social Security still offers more than just retirement income benefits. For instance, qualified recipients may receive Social Security income because they are: • Disabled. • The spouse or child of someone who is receiving benefits. • A divorced spouse of a qualified Social Security recipient. • The spouse and divorced spouse or the child of a qualified worker who has died. • A dependent parent of a qualified worker who has died. CSM202103SOCIALSEC 4 [email protected] www.certifiedsafemoney.com
DO YOU (OR YOUR SPOUSE) QUALIFY FOR SOCIAL SECURITY RETIREMENT BENEFITS? To be eligible for Social Security retirement benefits, you must work and pay taxes into the Social Security program. You must also have enough work credits. These are earned based on the amount of income you accrue over time. For example, in 2020, you earn one credit for each $1,410 in earnings. Qualified workers can earn a maximum of four credits each year. Most people need 40 credits—which equates to ten years of work—to qualify for Social Security retirement income. The work credits required for Social Security disability income may be less, based on your age. The same holds for the receipt of Social Security survivor’s benefits when a worker dies. The taxes you pay into the system do not go into a personal account for your own future Social Security benefits. Instead, these tax dollars are paid into a shared account which, in part, is used to pay the benefits of current retirees. When you begin to receive Social Security benefits, the funds will come, at least in part, from the then-current workforce paying taxes into the system. An individual may qualify for both spousal benefits and their retirement income benefits in some instances. In this case, if you have enough credits to be eligible for your own Social Security benefits and you apply for these benefits and benefits as a spouse, the Social Security Administration will always pay your benefits first. However, suppose the amount of your spousal benefits is higher than your personal Social Security retirement income benefits. In that case, you will instead receive a combination of benefits that equal the higher spousal benefit. HOW MUCH SOCIAL SECURITY TAX WILL YOU PAY INTO THE SYSTEM WHILE WORKING? The tax money that you and other workers pay into the Social Security program is used for funding the benefits of current retirees and other recipients (such as those who are disabled or the survivors of a deceased recipient). Social Security taxes are based on the number of your earnings, up to a certain amount (in 2021, that amount is $142,000.) You also pay Medicare taxes that cover the benefits of those eligible for this healthcare insurance program. CSM202103SOCIALSEC 5 [email protected] www.certifiedsafemoney.com
Social Security and Medicare Taxes (in 2021) Source: Social Security Administration *Note that self-employed individuals are responsible for paying both the employer and the employee portion of these taxes. If you work for someone else Social Security tax Medicare tax You pay 6.2% 1.45% Your employer pays 6.2% 1.45% If you are self-employed You pay 12.4% 2.9% CSM202103SOCIALSEC 6 [email protected] www.certifiedsafemoney.com
HOW MUCH SOCIAL SECURITY INCOME CAN YOU RECEIVE? The Social Security Administration bases your retirement benefits on how much you earned during your work career. Higher lifetime earnings will typically result in a higher amount of benefit—up to a specific limit. For example, the maximum monthly Social Security benefit in 2021 is $3,895 for someone who began receiving these benefits at their full retirement age. For someone who started taking Social Security at age 62 (in 2021) , the maximum monthly dollar amount of benefit is $2,324. There are several factors used for calculating the amount of your Social Security retirement benefit. These include: • Your taxed Social Security earnings. • The National Average Wage Index (which adjusts your past years’ contributions for wage inflation). • The number of years you have worked. Social Security is also designed to pay the annual cost of living allowances, or COLAs, which over time can increase the amount of benefit to help keep pace with rising inflation. While the percent increase in benefits has been relatively high in some years (for instance, 77% in 1950), there are other years where there is no benefit increase. One such example is in the years 2009 and 2010, which followed the recession of 2008. While you won’t receive an exact dollar figure until you file for your benefits, there is a way to at least get an estimate of how much your Social Security retirement income will be. The Social Security Administration (SSA) offers information about your earnings history and an estimate of your retirement (as well as disability and survivor’s benefits) on its website. You can find this information by going to https://ssa.gov and then clicking on the ‘My Social Security’ tab. You can create an account when you visit the website. After you have signed in and agreed to the terms of service, you can find information about your: • Last reported earnings. • Estimated monthly benefits if you file at age 62, full retirement age, and age 70. • Survivor’s benefits for your child and your surviving spouse. • Credits earned to qualify for Medicare benefits. You can also view, print, and save your full Social Security benefits statement. This statement provides more in-depth details regarding how your Social Security benefits are estimated. It also provides your full earnings record (including your total taxed Social Security and Medicare earnings), starting with the first year in which you earned income. The Social Security Administration also offers several benefit calculators that are available to use on its website. You may access these by going to https://ssa.gov/ benefits/calculators/. CSM202103SOCIALSEC 7 [email protected] www.certifiedsafemoney.com
HOW IS YOUR SOCIAL SECURITY RETIREMENT INCOME BENEFIT CALCULATED? The dollar amount of your Social Security retirement benefit is based on your lifetime earnings. The Social Security Administration adjusts, or “indexes,” your actual earnings. It does this to account for the changes in average wages since the year you received the earnings. At that point, the SSA then calculates your average indexed monthly earnings, or AIME, during the 35 years when you earned the most income. A formula is then applied to these earnings to arrive at your core benefit, more commonly referred to as your primary insurance amount (PIA). This is the amount that you would receive at your full retirement age (FRA). Several factors could change the dollar amount of your Social Security retirement benefit. These could include: • When you opt to start taking your benefits, you may begin to receive benefits as early as age 62, but will reduce the dollar amount. If, however, you wait until after your full retirement age to start taking your benefits, you could increase the dollar amount beyond that of your FRA. • Cost of living adjustments. You are eligible for cost of living benefit increases in the year you turn age 62, even if you are not yet taking your benefit. These benefit adjustments reflect the growth— if any—in the cost of living as measured by the Consumer Price Index. • Receipt of a government pension. If you are eligible for a retirement or disability pension from employment through which you did not pay Social Security taxes—such as a government job—the Social Security Administration applies a different formula to your average indexed monthly earnings. According to the Social Security Administration (SSA), this benefit replaces roughly 40% of pre-retirement earnings for an average wage earner. This replacement figure can be higher or lower, depending on whether you are a higher or lower wage earner. For example, the SSA states that the replacement percentage can be closer to 75% for lower earners and as low as 27% for those who earn higher pre-retirement income. The amount of benefit you earn from Social Security can also be dependent on when you file for this income—early, late, or at your full retirement age (FRA). CSM202103SOCIALSEC 8 [email protected] www.certifiedsafemoney.com
WHEN SHOULD YOU FILE FOR YOUR SOCIAL SECURITY RETIREMENT INCOME? For those who qualify for Social Security retirement income, benefits may be taken as early as 62. In this case, however, the dollar amount is reduced—and it will remain permanently reduced for the rest of your lifetime. If you opt to take your Social Security retirement income early, the reduction in your benefits will be approximately one-half of one percent for each month you start receiving these benefits before your full retirement age. Social Security Benefit Reduction for Early Filers Cost of Taking Social Security Income before Your Full Retirement Age Year of Birth Full Retirement Age (FRA) Months Between age 62 and FRA Retirement Benefit is Reduced By A $1,000 Benefit Would be Reduced By 1943-1954 66 48 25.00% $750 1955 66 and 2 months 50 25.83% $741 1956 66 and 4 months 52 26.67% $733 1957 66 and 6 months 54 27.50% $725 1958 66 and 8 months 56 28.33% $716 1959 66 and 10 months 58 29.17% $708 1960 and later 67 60 30.00% $700 Age Full Retirement Age 66 Full Retirement Age 67 62 25% reduction 30% reduction 63 20% reduction 25% reduction 64 13.3% reduction 20% reduction 65 6.7% reduction 13.3% reduction 66 Full Benefits 6.7% reduction 67 Full Benefits Another way to determine the difference in dollar amount is to consider the “cost” of taking your benefits before your full retirement age. Even so, based on your specific situation and financial needs, there are some cases where taking Social Security retirement benefits early— between age 62 and your full retirement age—can make sense. CSM202103SOCIALSEC 9 [email protected] www.certifiedsafemoney.com
Many people wait until they have reached their full retirement age (FRA) to file for Social Security. At that time, they are eligible for their total benefit amount. For many years, the full retirement age for Social Security was 65 for all qualified recipients. But since 1983, the full retirement age can be anywhere between age 65 and 67, depending on your birth year. Social Security Full Retirement Age Year of Birth Minimum Retirement Age for Full Benefits 1937 or Before 65 1938 65 + 2 months 1939 65 + 4 months 1940 65 + 6 months 1941 65 + 8 months 1942 65 + 10 months 1943 to 1954 66 1955 66 + 2 months 1956 66 + 4 months 1957 66 + 6 months 1958 66 + 8 months 1959 66 + 10 months 1960 or Later 67 Source: Social Security Administration CSM202103SOCIALSEC 10 [email protected] www.certifiedsafemoney.com
If you wait until after you’ve reached your full retirement age to file for Social Security, you could increase the dollar amount of your benefit. This increase is based on the delayed retirement credit. It is also permanent. For every year that you wait, the amount of the benefit will increase by 8%. As an example, if your FRA is 66, and the amount of your benefit at that time is $2,000 per month, you could end up with a 32% increase in the dollar amount of your benefit if you file at age 70. So, suppose you do not need or want to start taking Social Security as soon as you are eligible for full benefits. In that case, it pays to wait (note that you may continue to delay the receipt of your benefits beyond age 70, but you will not be able to build up any more delayed retirement credits). If you take benefits at age: Monthly benefit amount: 66 $2,000 67 $2,160 68 $2,320 69 $2,480 70 $2,640 (This example uses simple increases of 8% per year, based on an original dollar amount of benefit of $2,000. It does not factor in any cost of living adjustment or COLA that the benefit recipient may be eligible for). CSM202103SOCIALSEC 11 [email protected] www.certifiedsafemoney.com
WAYS TO INCREASE THE AMOUNT OF SOCIAL SECURITY INCOME YOU RECEIVE There are ways to increase the amount of Social Security benefits. Per the example above, you can wait until after your full retirement age to file for these benefits, increasing the dollar amount of your benefit by 8% each year beyond your FRA. It is also beneficial to work and pay taxes into the Social Security system for at least 35 years. Otherwise, if you have any “gaps” in your employment, there could be one or more $0’s figured into your benefit calculation. Likewise, maximizing your earnings while you are still working could boost your income from Social Security. You could do so by working overtime at your current employer or generating additional income from a side or part-time job. Spouses could also qualify to receive Social Security retirement benefits. This is true, even if they have never worked and earned wages from an employer. To qualify, the spouse must be at least age 62, and the worker spouse must be receiving Social Security retirement or disability benefits or be eligible to receive them. Adding spousal benefits into the mix could maximize the total amount of household income you receive from Social Security. Like the worker’s Social Security retirement benefits, if a spouse begins receiving their benefits between age 62 and their full retirement age (based on their birth year), they will permanently reduce the benefit they receive. Suppose the spouse waits until their full retirement age to start receiving their Social Security spousal benefits, though. In that case, the benefit amount they receive will be equal to one-half of their worker spouse’s full benefit amount. By adequately coordinating when each spouse starts to take their benefits, married couples could significantly increase the overall amount received from Social Security. CSM202103SOCIALSEC 12 [email protected] www.certifiedsafemoney.com
WHAT HAPPENS TO MY SPOUSE’S SOCIAL SECURITY WHEN THEY DIE? If your spouse dies and you are not caring for an eligible child, you could receive Social Security survivor benefits. These are also frequently referred to as Social Security widow or widower’s benefits. These benefits can be received when you reach age 60. To qualify for survivor’s benefits, though, your deceased spouse (who was the insured worker) must have gained at least forty credits by the time of their death if they were age 62 or older. If your deceased spouse was younger than age 62 when they died, the number of work credits for you to be eligible for benefits is reduced. For example, the Social Security Administration reduces the gained credit requirement “one by one” each year to a minimum of just six credits required if the deceased worker and spouse were age 28 or younger when they die. It is important to note that a surviving spouse will not receive survivor benefits if they remarry before turning 60. However, if the survivor does remarry at age 60 or later, they are not disqualified for Social Security survivor benefits. In addition to the receipt of monthly Social Security survivor’s benefits, the SSA also makes a one-time payment of $255 when a worker/benefit recipient dies to the worker’s qualifying spouse or children. The survivors must apply for this payment within two years of the date of the individual’s death. Ex-spouses may also be eligible for Social Security benefits based on their former husband or wife’s earnings. For instance, if you are divorced, you may be able to receive benefits based on your ex-husband or wife’s work record—even if he or she has remarried— provided that the following factors apply: • Your marriage lasted for a minimum of ten years. • You are age 62 or older. • You are unmarried. • Your ex-spouse is entitled to receive Social Security benefits (although they do not have to be receiving those benefits yet). • The benefits you are entitled to receive based on your work record are less than the benefits you would receive based on your ex-spouse’s work record. Similar to Social Security spousal benefits, your benefit as a divorced spouse is equal to one-half of your ex-spouse’s full retirement amount, provided that you begin receiving those benefits at your own Social Security FRA (based on your birth year). The amount will be less if you start receiving benefits earlier than that time. Should you remarry, you typically will not be able to continue collecting Social Security benefits based on your ex-spouse’s work record—unless your later marriage also ends (either by death, divorce, or annulment). CSM202103SOCIALSEC 13 [email protected] www.certifiedsafemoney.com
IS YOUR SOCIAL SECURITY BENEFIT TAXABLE? Your Social Security benefit could be taxable depending on several criteria, including whether you have other income sources (including wages, self-employment income, dividends, interest, or other taxable income that is required to be reported on your annual tax return). It will also be dependent on how you file your tax return (e.g., as a single individual or as a married person who is either filing jointly or separately). So, depending on whether you file as a single or a married taxpayer and how much you earn from other sources, you could have up to 85% of your Social Security benefit taxed. In this case, for instance, you will have to pay tax on a percent of your Social Security benefits (in 2020) if you meet any of the following criteria: You file a federal tax return as an individual, and your combined income is: • Between $25,000 and $34,000 (up to 50% of your benefits may be taxable). • More than $34,000 (up to 85% of your benefits may be taxable). You file a joint tax return, and you and your spouse have a combined income that is: • Between $32,000 and $44,000 (up to 50% of your benefits may be taxable). • More than $44,000 (up to 85% of your benefits may be taxable). You are married, and you file a separate tax return. *Note that your combined income equals your adjusted gross income plus any non-taxable interest earned, plus one-half of your Social Security benefits. CSM202103SOCIALSEC 14 [email protected] www.certifiedsafemoney.com
Reduction of Social Security Benefits Based on Your Income (in 2021) Under Full Retirement Age (FRA) In the year you reach Full Retirement Age (FRA) Give up $1 in Social Security benefits for every $2 you earn above the $18,960 limit Give up $1 in Social Security benefits for every $3 you earn above the $50,520 limit These benefits are not lost forever. Instead, the amount of your Social Security benefit will be increased to account for them after you have reached your full retirement age. CAN YOUR SOCIAL SECURITY RETIREMENT BENEFITS BE REDUCED? In addition to the possibility of your Social Security retirement benefits being taxable, there is also the risk this could reduce income. For instance, if you are younger than your full retirement age and you also earn more than a certain amount of money, you could experience a reduction in your benefits. For instance, if you plan to work after you have filed for your Social Security retirement benefits, some of your benefits may temporarily be withheld based on your income. In this case (in 2020), your Social Security benefits would be reduced by $1 for every $2 you earn more than $18,240. In the year you reach full retirement age, your benefits will be reduced by $1 for every $3 you earn above $48,600 (in 2020). Then, beginning with the month that you reach your full retirement age, your Social Security benefits will no longer be reduced. CSM202103SOCIALSEC 15 [email protected] www.certifiedsafemoney.com
Before applying for your Social Security benefits, be sure that you have all of the required information on hand. This includes: • Date and place of birth. • Marriage or divorce details, such as the name of your current or former spouse, beginning (and ending) date of marriage(s), and place of marriage(s). • Names and birthdates of children under age 18 and unmarried, age 18 to 19 who are still attending secondary school on a full-time basis or who became disabled before age 22. • U.S. military service details, including the type of duty and branch and the dates of your service period(s). • Employer details for the current year and the prior two years, including employment start and end dates. • Self-employment information for the current year and the prior two years, including the type of business you operate and your total net income amount. • Direct deposit information, including the account type and number, as well as the routing number of your bank. There are cases where the Social Security Administration may request additional information. These could include items like your original birth certificate, marriage licenses, or tax returns. Once you have completed the application for benefits, you will receive a receipt, as well as a confirmation number that you may use for checking the status of your application online. You can also follow up over the phone or in person at your local Social Security Administration office. HOW TO FILE FOR SOCIAL SECURITY BENEFITS Typically, individuals should apply for Social Security retirement benefits approximately four months before they want the income to begin. This is because applications for Social Security benefits can only be processed a maximum of four months before the benefits are scheduled to start. Therefore, if you intend to receive your benefits when you turn age 62, the earliest that you can apply is when you are age 61 and nine months. You can then expect to receive your first Social Security retirement income payment four months later or the month after your 62nd birthday. There are a few different options you have for filing for your Social Security benefits. These include: • Online – One of the most convenient filing methods for Social Security is through the SSA’s website. You can go there by visiting www.ssa.gov. If you go this route to file, the Social Security Administration will ask you to create a new account or sign in to your “my Social Security” account when you begin the application. • Phone – You can also apply for Social Security benefits via phone by calling the SSA at (800) 772-1213. • In-person – You can also visit your local Social Security office to file for your retirement benefits. An appointment is not needed. However, if you call ahead and schedule a time, it could reduce your time waiting. CSM202103SOCIALSEC 16 [email protected] www.certifiedsafemoney.com
Social Security spouse’s benefits may also be applied in the above manners. To file for spousal benefits, you (or your spouse) must be at least 61 years and nine months old and want the benefits to begin no more than four months in the future. SOCIAL SECURITY MAXIMIZATION STRATEGIES Just like with other financial strategies, there are ways that you could increase the amount of benefit you receive from Social Security. One option is to delay filing for these benefits until after you have reached your full retirement age. In this case, your benefits can be increased via the delayed retirement credit, which raises the dollar amount by 8% per year. Therefore, if your FRA is 66, and you wait to file for your Social Security retirement income until you turn age 70, you could give yourself a 32% raise. If you are married and both you and your spouse work, you could file for your Social Security benefits at different times. With this strategy, the spouse who earns less can take their benefits as soon as they are eligible at age 62. This allows the other, higher-earning spouse to file for their benefits at age 70 and allows the dollar amount to increase, based on the delayed retirement credit. WHEN WILL YOU RECEIVE YOUR SOCIAL SECURITY INCOME? Social Security benefits are paid each month based on where your birthday falls in your birth month. For example, your Social Security benefit will be paid on the second Wednesday of every month if your birthday falls between the first and the tenth of the month. If your birthday falls between the eleventh and the twentieth, your benefit will be paid on the third Wednesday of the month. If you were born between the twenty-first day and the thirty-first day of the month, your Social Security benefit payment would be made on the fourth Wednesday of the month. CSM202103SOCIALSEC 17 [email protected] www.certifiedsafemoney.com
When Will Your Social Security Benefits Payment be Made? If your birth date is on the: Your Social Security benefit will be paid on the: 1st – 10th Second Wednesday of the month 11th – 20th Third Wednesday of the month 21st – 31st Fourth Wednesday of the month Source: Social Security Administration SOCIAL SECURITY RESOURCES There is a lot of information about the Social Security program and the benefits you may be entitled to. Because of that, this program can sometimes seem a bit overwhelming. That’s why it is vital to have various Social Security resources you can turn to. Some of the essential Social Security resources include the following: • Social Security Administration main website – https://www.ssa.gov • Estimate of Social Security benefits – https://ssa.gov/OACT/quickcalc/ • Social Security Full Retirement Age Calculator – https://ssa.gov/benefits/ retirement/planner/ageincrease.html • Social Security Online Application for Retirement Benefits – https://secure. ssa.gov/iClaim/Ent001View.action MILESTONES THAT CAN IMPACT YOUR SOCIAL SECURITY RETIREMENT BENEFITS As you go through life, you have likely achieved many milestones. When it comes to Social Security benefits, there are also several important ages and milestones to be mindful of, such as: • Age 50 – Age 50 is the earliest age at which a worker’s surviving spouse may receive a Social Security widow/widower’s benefit if they become disabled (note that the amount of this benefit is generally 71.5% of the deceased spouse’s full retirement age (FRA) benefit amount). • Age 55 – At age 55, the 10% premature distribution penalty will no longer apply for qualified employer-sponsored retirement plans if the employee separates from service (either in the year they turn age 55 or later). Note that this does not apply with Individual Retirement Accounts (IRAs). CSM202103SOCIALSEC 18 [email protected] www.certifiedsafemoney.com
• Age 59 ½ - At age 59 ½, there is no longer a 10% early withdrawal penalty incurred from the IRS if money is accessed from IRAs (Individual Retirement Accounts) and employer-sponsored retirement savings plans. • Age 60 – At age 60, it is the earliest age where a widow or widower may receive the Social Security survivor’s benefit. This benefit is usually 71.5% of the deceased spouse’s full retirement age (FRA) benefit. • Age 62 – Age 62 is the earliest age that a qualified worker may start receiving their Social Security retirement income benefits. However, this benefit will be permanently reduced if taken before reaching the worker’s full retirement age (FRA). • Age 62 – Age 62 is also the earliest age at which a spouse may receive the Social Security spousal benefit based on their worker spouse’s earnings record. • Age 65 – Age 65 is the age at which Medicare healthcare insurance benefits are available. • Age 66 – For those born between 1943 and 1954, age 66 is the full retirement age. Each year after that, the full retirement age increases by two months until it reaches age 67 for individuals born in 1960 or later. There are other age 66 milestones as well, such as being the age at which a spouse may receive the maximum spousal benefit (which is 50% of their working spouse’s benefit), as well as the age where a surviving spouse may receive 100% of their deceased spouse’s Social Security retirement benefit, which includes any delayed retirement credits. • Age 67 – Age 67 is the full retirement age (FRA) for eligible workers born in 1960 or later. • Age 70 – Age 70 is the age at which Social Security delayed retirement credit stops. You can still wait until after age 70 to begin receiving your benefits. But the dollar amount will no longer increase. • Age 72 – Based on the SECURE Act’s passage, which took effect on 1 January 2020, age 72 is when traditional IRA and retirement plan holders must start taking their annual Required Minimum Distribution (RMD). If this distribution is not taken, the IRS will penalize the investor based on the amount of RMD that should have been accessed from their account(s) (note that RMDs are not required to be taken from Roth IRAs Roth retirement plans). CSM202103SOCIALSEC 19 [email protected] www.certifiedsafemoney.com
COORDINATING OTHER INCOME SOURCES WITH SOCIAL SECURITY BENEFITS While Social Security can make up a significant portion of your overall retirement income, you will likely have other sources of incoming cash flow, too. These may include: • Government or another employersponsored pension plan. • Interest or dividends from personal savings and investments. • Income from an annuity. • Reverse mortgage. Because of that, you must determine how all your income sources will work together. It is also beneficial to have a reasonable estimate of what your living expenses in retirement will be. Then you can determine whether your current income sources will be sufficient or if you will instead have an income “gap” that will need to be filled (or if you will need to reduce some of your living expenses). WHERE TO GO FROM HERE When to file for Social Security is an important decision. What works best for one individual or couple may not be the right strategy for another. Therefore, before you file for your Social Security benefits, it is recommended that you discuss your short- and long-term financial objectives, as well as all your potential income options, with a financial specialist who focuses on income planning. This can help you ensure that all your income generators will work in conjunction with one another and that you can maximize the overall amount of income you receive. CSM202103SOCIALSEC 20 [email protected] www.certifiedsafemoney.com To schedule a retirement income strategy session that includes how and when to apply for Social Security benefits, please feel free to reach out to us directly for more information at [email protected]
CSM202103SOCIALSEC 21 [email protected] www.certifiedsafemoney.com All investments, retirement, and estate planning strategies (collectively “Strategies”) have inherent risks. Content is not personalized financial advice and should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the author on the date of publication and may change in response to market conditions. Although the information has been gathered from sources believed to be reliable, we do not guarantee its accuracy or completeness. There can be no assurance that you will achieve your goals if you implement any of the Strategies discussed. Past performance does not guarantee future results. Indexed universal life insurance may not be suitable for you depending upon your investment objectives, risk tolerance, financial situation, and liquidity needs. Accessing policy cash value through loans and surrenders may lead to a permanent reduction of the policy’s cash value and death benefit, which may lead to a potential lapse of the policy. Insurance product guarantees are subject to the claims-paying ability of the issuing company. There may be tax penalties for distributions prior to age 59½. Working with a highly-rated professional does not ensure that you will experience a higher level of performance. Professional awards do not guarantee future investment success. Please contact the professional for more information regarding the criteria for any awards or rankings noted. Ratings can be based on client evaluations and the professional’s activity. Hyperlinks in this Booklet are provided as a convenience. Neither the information in this Booklet nor any option expressed herein constitutes an offer to sell or solicit any person to purchase any security or product. Investment decisions should not be made based on information in this Booklet. Individuals should rely exclusively on the offering material provided to them by a licensed professional or regulated entity when considering whether to invest. Usage of this Booklet requires your acknowledgment that you shall hold CertifedSafeMoney. com, Financial Media & Marketing, LLC, and its Officers, Directors, Employees, or Agents (collectively “FMM”) harmless. In addition, you specifically acknowledge and agree that no oral or written information or advice provided by FMM (Including without limitation its call center representatives) will (I) constitute legal or financial advice or (II) create a warranty of any kind concerning this Booklet or the services found on any website(s) related to or owned by FMM, and users should not rely on any such information or advice. FMM disclaims all representations and warranties of any kind, express, implied, statutory, or otherwise, to you and/or any other party, including, without limitation, any warranties of accuracy, timeliness, completeness, efficacy, merchantability, fitness for any particular purpose, and usefulness of the content provided. FMM shall have no tort, contract, or any other liability to you or any other users of content from this Booklet and/or to any other party. FMM shall not be liable to you and/or any other party for any lost profits or lost opportunities or any indirect, special, consequential, incidental, or punitive damages whatsoever arising out of or relating to the use of this Booklet, even if FMM has been advised of the possibility of such damages. Tax and legal information provided is general in nature and should not be construed as legal or tax advice, and it is not a substitute for your independent research and evaluation of any issue. If specific legal or other expert advice is required or desired, the services of an appropriate, competent professional should be sought. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.
certifiedsafemoney.comRkJQdWJsaXNoZXIy MjEyMTc2MA==