Retirement Income Advice: Social Security
Social Security Overview
At Bobetich Retirement, my clients often ask me whether their social security will be enough to provide them financial independence once they retire.
Here’s a fact that not many people know: Although social security may be able to replace 57% of the income of a low-earning individual, it will only be able to replace as little as 27% of the income of a high-earning individual. That’s just around a quarter of their income.
If you have paid into the Social Security program throughout your entire working life, here are some facts that you need to understand:
- No one can outline their Social Security income, no matter how long you live
- You will receive Cost-of-Living Adjustments (COLA), which will ensure your purchasing power is not diminished by inflation. This amount averaged to about 1.4% annually over the past decade.
- You do not have to be knowledgeable about your investments or make frequent financial decisions since the program manages everything automatically.
Keys to Optimizing Social Security Benefits
As a person who may be looking forward to their retirement years to relax, you may be tempted to retire at 62 and start drawing on your Social Security benefits. However, this is not the most financially sound decision.
Delaying your retirement and waiting a few years just until you turn 66 can increase your benefits. If you wait until 70, you will be able to maximize the benefits from your Social Security.
Some important questions to ask in order to optimize your Social Security benefits are:
- How much income do you require once you retire?
- How are your Social Security benefits calculated and how you can maximize them?
- How can you increase your income through the “File and Suspend” strategy?
- What is the impact on your Social Security benefits when working in retirement?
- How can you receive benefits from a former spouse?
- How can the government tax your Social Security benefits?
Optimize Your Social Security Benefits Past Your Full Retirement Age (FRA)
At Bobetich Retirement, we can help you optimize your Social Security strategy by delaying your benefits past your FRA up to age 70, which can help you earn more.
For example, if you were born between 1943 and 1954, your FRA is 66 years and 0 months. If you retire before you hit your FRA, you will get less Social Security money than if you had waited until you turned 66. On the other hand, if you retire after you hit your FRA, then you will receive more money.
For more information, click here to read
WILL SOCIAL SECURITY PROVIDE ME WITH ENOUGH RETIREMENT INCOME?
