Key Considerations

At what age should you apply for Social Security?

The age at which you apply for Social Security benefits has a tremendous impact on your monthly income and the total amount of benefits you stand to receive over your lifetime.  People born between 1943 and 1954 are eligible to receive full Social Security benefits at age 66.  Although early eligibility begins at age 62, if you apply at this age your benefit will be reduced by 25%.  On the other hand, if you wait until age 70 to collect, your benefits will be increased by 32%.

Should you take a spousal benefit?

A married person can receive spousal benefits equal to half of his or her spouse’s benefit.  It is possible to start receiving a spousal benefit and then later switch over to your own benefit after your benefit has increased between the ages of 66 and 70.  Coordinating spousal benefits is one of the most complex areas of Social Security planning.  It provides many opportunities to maximize a married couple’s combined benefits, but the rules are complicated and you must follow them carefully.

How divorce affects Social Security benefits:

You can receive spousal benefits based on your ex-spouse’s work record if the marriage lasted at least 10 years and you are currently unmarried.

How widowhood affects Social Security benefits:

If your spouse dies, you can apply for survivor benefits as early as age 60.  If your spouse is receiving benefits when he dies, the survivor benefit will be 100% of your spouse’s benefit.  If you are both receiving Social Security when your spouse dies, the deceased spouse's benefit will stop.  You can then switch over to your survivor benefit if it is higher.

How working affects Social Security benefits:

If you are receiving benefits and are under full retirement age, some of your benefits may be withheld if you work.

How benefits are taxed:

Your Social Security benefits may be taxable depending on how much other income you earn.  The issue of taxation gathers complexity when you are coordinating Social Security with other sources of income.  Keeping an eye on the after tax bottom line is critical in the decision making process.

Since it is nearly impossible to determine a maximization strategy for Social Security on your own we utilize sophisticated software to analyze all possible strategies.  For a complimentary Personalized Social Security Analysis which includes a written step-by-step strategy for maximizing your Social Security benefits please contact our office at 563-359-3475.