07/06/2018
Maximize Social Security - 2018
Your Social Security payments depend on your earning history and the age you start receiving benefits. Take a look at a few of the questions we receive when helping our clients plan for a successful retirement.
How is my benefit calculated? Social Security benefits are calculated by your 35 highest earning years. If you have not worked for at least 35 years, zeros are factored into your calculation, which will decrease your benefit.
How would earning a higher income effect my Social Security Benefit? Earning more today means a higher benefit in your future. In 2018 up to $128,700 in earned income can be used to calculate your payment. Is it time to ask for that long overdue raise?
When is my Full Retirement Age (FRA)? The earliest a person can start receiving Social Security benefits is at age 62, but you will permanently reduce your lifetime benefit by not waiting until your FRA. For most current workers your FRA is sometime between age 66 and 67.
How much does my benefit increase if I delay taking Social Security? Each year you delay claiming your Social Security benefit after your full retirement age your payments will increase by about 8% each year up to age 70. At age 70 there is no benefit for waiting to claim your benefit.
Can I still file and suspend? File and suspend was a tax loophole that allowed one spouse to file for their Social Security, suspend taking payments until a later date, and allow their spouse to receive half of their payment while delaying the spouses Social Security benefit as well. Congress closed this tax loophole in 2015.
How can I make sure my spouse is taken care of? Waiting as long as possible, especially for the higher earning spouse, can protect your spouse for the long-term. Once one of you passes away you are only able to keep the higher of your two Social Security income benefits. This is especially important when you expect your spouse to outlive you.
Should I just take my Social Security while I am working? If you decide to take Social Security while you are still working and have not yet reached your Full Retirement Age (FRA) the limit of income you can receive in 2018 is $17,040 ($1,420 per month). For every $2 you earn over the limit your benefit will be reduced by $1.
These are a few questions that we receive each day in working with individuals to create a retirement income plan that will last their lifetime. Each of the retirement scenarios we come across are unique and yours will be too. Please work with your advisor to make the right decision regarding Social Security as it will likely be one of the most important retirement decisions you make.
Ryan Ferguson, AIF®
retireSmartNM
[email protected]
(505) 835-7600
