One key component of retirement planning is when to and how to collect your Social Security benefits. If you are going to die at the exact actuarial table age, to maximize your Social Security benefits males should begin at age 68 and women should begin at age 70. The actuarial table states men die at age 84 and women die at age 86.

 

For every year you delay your Social Security benefits after turning your floor retirement age your monthly income increases by 8%. When deciding “should I wait till the age of 70 to maximize my income benefits” another element of this decision is the health of myself and my spouse. If both spouses are collecting Social Security benefits when one spouse passes away the other spouse’s check could be increased if their check was the smaller of the two. Example, Ted and Alex are both receiving Social Security, Ted’s check is $1,800 and Alice’s check is $1,536; if Ted passes away  Alice’s check will be adjusted $264 equaling Tedd’s monthly Social Security benefits. Realizing this benefit increase can have a dramatic impact on planning retirement income and making sure a spouse income is maximized. The adjustment only applies if the higher monthly check recipient diseases.

 

Another focal point on taking Social Security benefits is the taxation of benefits. As of 1984, Social Security benefits became subject to taxation depending on income. For single filers if their income is less than $25,000 all benefits will be tax-free; married filer‘s income level is set at $32,000. If your income levels are higher than these amounts up to 85% of your benefits could be subject to taxation. If you’re receiving Social Security benefits are still working after full retirement age, benefits are not reduced due to earning limitations, however, they can be reduced due to taxation.

 

At AdVance senior options, LLC we will look at your retirement goals, age, health, Social Security and other investments to help you design a successful retirement plan.