5 com­mon So­cial Se­cu­rity ques­tions an­swered

Daily Local News (West Chester, PA) - - BUSINESS -

There’s no ques­tion that So­cial Se­cu­rity is a cor­ner­stone of re­tire­ment in­come for many Amer­i­cans. Yet, de­cid­ing when to take So­cial Se­cu­rity ben­e­fits is some­thing that many peo­ple strug­gle with.

As with most fi­nan­cial de­ci­sions, the right move de­pends on a va­ri­ety of fac­tors unique to each in­di­vid­ual. If you are con­tem­plat­ing when to pull the trig­ger on So­cial Se­cu­rity ben­e­fits, read on for an­swers to some com­mon ques­tions.

At what age can I claim So­cial Se­cu­rity?

As it stands to­day, Amer­i­cans are el­i­gi­ble at age 62. If you start then, you will re­ceive the low­est monthly ben­e­fit pos­si­ble. The longer you de­lay claim­ing, the larger the ben­e­fit will be. The amount in­creases by eight per­cent each year. If you de­lay your claim, you should be­gin col­lect­ing by age 70 as monthly ben­e­fits do not in­crease af­ter that point (www.ssa.gov/plan­ners/re­tire/re­tirechart.html).

What is my full re­tire­ment age?

For years, full re­tire­ment age, or the age when you’re el­i­gi­ble to re­ceive your com­plete ben­e­fit from So­cial Se­cu­rity, was 65. It is now higher.

For those born from 1943 to 1954, it is age 66; for those born be­tween 1955 and 1959, it falls be­tween ages 66 and 67; and for those born in 1960 or later, full re­tire­ment age is 67 (www.ssa. gov/plan­ners/re­tire/re­tirechart. html).

What is the right age to claim ben­e­fits?

The an­swer to this ques­tion varies de­pend­ing on your cir­cum­stances. When de­cid­ing the tim­ing that works for you, con­sider the fol­low­ing:

• The like­li­hood of liv­ing a long life in re­tire­ment. Ac­cord­ing to the So­cial Se­cu­rity Ad­min­is­tra­tion, the av­er­age life ex­pectancy for a per­son reach­ing age 65 is 84 for a man and just shy of 87 for a woman.

• Your fi­nan­cial need for a reg­u­lar source of in­come once you qual­ify to claim ben­e­fits. This may de­pend in part on whether you plan to con­tinue work­ing un­til you reach your full re­tire­ment age, or even af­ter, in which case you may be able to de­lay tak­ing So­cial Se­cu­rity ben­e­fits.

• If you’re mar­ried. For peo­ple with spouses, it’s im­por­tant to ver­ify which of you will qual­ify for the larger ben­e­fit. Once one spouse dies, the sur­viv­ing spouse will con­tinue to col­lect the high­est of the two ben­e­fits earned in the house­hold.

Can I keep work­ing and still col­lect So­cial Se­cu­rity?

Yes, but the So­cial Se­cu­rity Ad­min­is­tra­tion ap­plies an earn­ings limit if you haven’t yet reached full re­tire­ment age. In 2018, the limit for those who have not yet reached the year of their full re­tire­ment age is $17,040. Af­ter you earn that much from work, your So­cial Se­cu­rity ben­e­fits will be re­duced by $1 for ev­ery two dol­lars you earn over the limit. In the year you will reach full re­tire­ment age, that limit rises to $45,360. Once you sur­pass that amount, $1 of your So­cial Se­cu­rity ben­e­fits is re­duced for ev­ery $3 you earn over the limit. Af-

ter you have reached full re­tire­ment age, the earn­ings limit goes away. At that point, you can con­tinue work­ing and earn as much as you’d like with­out los­ing any So­cial Se­cu­rity ben­e­fits (www.ssa. gov/plan­ners/re­tire/while­work­ing.html).

How are my ben­e­fits de­ter­mined?

Ben­e­fits are based on your life­time earn­ings,

with an em­pha­sis on the 35 years where you earned the most in­come. A for­mula is ap­plied to those earn­ings to de­ter­mine what you qual­ify to re­ceive at full re­tire­ment age. This is the ba­sis for de­ter­min­ing any ad­just­ment to your ben­e­fits if you claim prior to or later than your full re­tire­ment age.

Th­ese are a few of the fac­tors that will af­fect the de­ci­sions you make on tim­ing your So­cial Se­cu­rity ben­e­fits. If you have ques­tions about your sit­u­a­tion, con­tact your lo­cal So­cial Se­cu­rity of­fice, visit www.ssa. gov or dis­cuss this mat­ter in

more de­tail with a fi­nan­cial ad­vi­sor. Bron­wyn L. Martin is a Fi­nan­cial Ad­vi­sor Char­tered Fi­nan­cial Con­sul­tant with Martin’s Fi­nan­cial Con­sult­ing Group, a fi­nan­cial ad­vi­sory prac­tice of Ameriprise Fi­nan­cial Ser­vices Inc. in Ken­nett Square and Havre de Grace, Md. She spe­cial­izes in fee­based fi­nan­cial plan­ning and as­set man­age­ment strate­gies and has been in prac­tice for 18 years. To con­tact her visit www. ameriprisead­vi­sors.com/ bron­wyn.x.martin

Bron­wyn Martin

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.