5 Things To Think About Before Electing To Take Social Security That You Probably Haven’t Thought Of.
Social Security could be one of your greatest income sources when in retirement. Even if it isn’t, you still want to get as much as you can out of it. Making what should be a simple choice could make the difference of hundreds of thousands of dollars over your lifetime. Unfortunately, you have one chance to get it right. As the government continues to make changes to make sure that Social Security will be there for you, you need to consider five things before you elect Social Security.
Take Social Security based on your retirement plan.
All too often you hear people take Social Security because they heard about what their neighbor, friend, brother or sister did. They all of a sudden became Social Security experts and tell you when to take Social Security because they did all these calculations. Before you listen, make sure your own Social Security strategy makes sense based on your own retirement plan, not theirs. It could cost you hundreds of thousands of dollars over your lifetime if you make a mistake.
Don’t elect Social Security too early.
Some make the mistake of taking Social Security as soon as possible because they are concerned about getting what’s theirs before the government makes any changes. Because you can elect Social Security at age 62, that doesn’t mean you should. If you are still working, more than likely you won’t be able to receive much of a benefit. Once you reach full retirement age (generally age 66, but up to 67 for some) you can elect Social Security and still work as much as you want without having any Social Security being withheld.
Consider how Social Security is taxed.
Even though Social Security is now taxed, you can still make most of it tax-free. Sometimes even all of it. If you are trying to make sure you keep as much as possible without paying taxes, then you must have a strategy when it comes to taking Social Security and your overall retirement plan. What will impact how much your Social Security is taxable is your modified adjustable gross income. Basically, any outside income will increase how much your Social Security is taxable. When you take income from your pensions, IRA’s, 401k’s, 403b’s, or any other retirement accounts that you have yet to pay taxes on will impact how much your Social Security will be taxable. Meet with a CPA or tax advisor and see how taxes will impact you in the future.
Don’t wait too long!
Every year after your full retirement age your Social Security benefit will grow by 8% simple interest every year until age 70. After age 70, there is no point in waiting to defer it any longer. Otherwise, you are just throwing money down the drain because the Social Security Administration won’t hold those checks for you. Also, don’t make the mistake of going through all your retirement savings just to fall back on Social Security. Sometimes you may need a combination of drawing Social Security and taking assets from your retirement accounts at the same time.
Survivor check could be the most important thing to consider
When it comes to Social Security and being married, one thing to consider in every retirement plan is to look at what happens when one spouse passes away early. When it comes to Social Security, when one spouse passes away, the larger of the two Social Security checks will stay, and the smaller of the two checks will go away. That is why it may make sense to defer the biggest Social Security check as long as possible to make sure that when one spouse passes away, there won’t be as big of a hole to fill.
As you can see, there are a lot of things to consider before taking Social Security, and this is only five things. You can download our complimentary 25 Secrets to Social Security guide if you want some more tips. At the very least, before you take Social Security, consider putting a whole plan together to make sure you are taking the best option for you and your family.
Hi. I’m Vince Oldre, certified financial planner. I want to talk to you about one of my favorite subjects, which is social security and help you figure out what the best way to take social security is. Now, social security is very complex so I’m just going to go over five things here today. But if you do want more help, please feel free to reach out to me. I’m more than happy to help you. Hi. I’m Vince Oldre, certified financial planner. I want to talk to you about one of my favorite subjects, which is social security and help you figure out what the best way to take social security is. Now, social security is very complex so I’m just going to go over five things here today. But if you do want more help, please feel free to reach out to me. I’m more than happy to help you. I do have our 25 secrets to maximizing social security that I’d put together and it’s a free download if you want to go to our website to make sure you can download it. I’ll put a link here on the video to make sure you can download my 25 secrets to maximizing your social security as well. One of the first things I want to talk about is when it comes to social security is make sure you’re basing your social security on your overall retirement plan. You don’t want to look at social security all on its own. You want to make sure that you’re looking at social security with your overall retirement plan and that’s because there are a lot of things that when it comes to your retirement plan that it can affect what your social security looks like, such as taxes, what your survivor check or your survivor income might look like if you’re married, what the income will look like as far as your guaranteed income sources, and whether or not you have enough money to make it out to maximize your social security. There’s a lot of different things you need to look at, so make sure that when you are trying to maximize your social security, you’re looking at it as a way that you’re trying to maximize your overall retirement plan. When it comes to social security, you also want to make sure you don’t elect it too early. If you elect social security too early and you’re still working, sometimes you might make too much money, which then the Social Security Administration is going to withhold some of your money. But the other thing when it comes to electing too early is the survivor check. If I take social security too early, I might leave a smaller social security check to my surviving spouse and that’s why it sometimes makes sense to defer one social security check if you’re a married couple. Now, the other thing you don’t want to do is wait too long. If you wait too long to take social security, you might spend through some of your assets and spend too much just to get a better social security check. What we find is that you can receive more social security and get social security more tax efficiently if you’re able to move things around but sometimes those things won’t really make up the difference of you taking social security at a certain point. The way things are going with the Administration and how social security is acting and we really don’t know how well it’s going to be funded here in the future. I’m not saying that you should defer your social security all the way until 70. Sometimes it makes sense, especially if you’re still working. Now, I know you’re probably already getting confused when it comes to all these different strategies when it comes to social security but I do want you to consider how social security is taxed because social security, 15% of it’s still tax-free, which means that that’s one of the best tax efficient vehicles that you have in retirement. That is why it’s really important to calculate your social security and use it within your overall retirement plan. Because as you move things around, you can actually make more of your social security more tax efficient depending on how much you have for assets, how much you have for pension income, how much you have for non-qualified or assets that are in your brokerage or savings accounts. That’s all going to change your strategy when it comes to taking social security. Unfortunately, you can really go to your neighbor and ask how your neighbor took social security. You can’t really ask your parents because they probably took it at age 62 and their life expectancy was a lot less or a lot younger than what yours might be. You really do have to put your own social security plan into your own retirement plan. What we offer everybody that comes into our office is a social security analysis. If you want to come in and meet with us, we’ll make sure you can walk away with your social security analysis. But what I’ll tell you is that social security analysis is only going to help you so far, meaning that if it’s not applied to your overall retirement plan, it really won’t do you a lot of good. We’re more than happy to put a social security analysis together for you and I’m more than happy to give you my 25 secrets to maximizing your social security. What I really want you to do is to take those things and put it into your overall retirement plan, not just look at social security all on its own. I hope this was helpful. If you have any questions, please feel free to give me a call or even email me. If you have any other questions when it comes to retirement planning, I always like to do these videos so make sure you keep those questions coming in so I can create more videos. As always, I want to thank you for watching and I look forward to seeing you next time.
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