According to Investment News, deciding when to start taking Social Security is a “strategy unto itself,” says James Robinson, a regional director at the Principal Financial Group, Inc.
Eligible individuals can start taking payment at 62, but they will receive smaller lifetime payouts than those who wait until the age when they are eligible for full benefits. Full benefits vary according to when the recipients were born.
“Those who delay receipt of their benefits could boost their income by 7 percent to 8 percent,” Robinson said.
People who take Social Security early will get less overall if they live to be 100 years of age. Those who have a shorter life expectancy or a family history of earlier deaths may want to consider filing early.
Those who wait to begin receiving payments until reaching full retirement age can continue earning money on the side without any adverse impact on their benefits. But things are different if a person chooses to draw Social Security early.
For example, a 62-year-old who begins taking Social Security can only earn up to $14,160 annually without having to give some Social Security up. After that, $1 will be withheld from that person’s benefits for every $2 earned.
In short, “don’t earn a lot of money if you’re going to file early because they’re going to reduce your benefit,” Robinson said.
Spousal benefits and taxes can further complicate Social Security planning.
In our next blog, these complications will be discussed. Check back in on Wednesday.
When do you think that you should begin collecting Social Security?
If you need help with your Social Security Disability benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.
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