8 Popular Questions Surrounding Social Security

Today’s Wisdom:

Social Security is a complex topic, and it’s surrounded by several misconceptions. We want you to avoid mistakes that could cost you thousands of dollars. On this edition of the podcast, we’ll examine eight crucial questions surrounding Social Security.

What You’ll Learn:

[5:55] – When Am I Eligible To Receive My Benefits?

  • Everybody eligible can receive Social Security benefits starting at age 62.
  • Age 70 is the latest you can wait before taking Social Security.
  • The longer you wait to begin withdrawing your benefit, the larger your benefit will be. However, it’s not always best to wait that long to begin taking your benefit. You have to examine your circumstances.
  • Widows and widowers can begin collecting a benefit at age 60.

[6:30] – Am I Eligible For Additional Benefits?

  • There is a disability component to Social Security.
  • Don’t over look this component. Do the research to see whether you might be eligible.

[7:17] – Will The Social Security Administration Help Me To Claim My Benefits?

  • In short, no. They aren’t going to hold your hand and offer personalized advice on how to maximize your benefits.
  • They’ll tell you how to fill out the forms, but they can’t tailor advice to you.
  • An advisor can help determine an appropriate strategy for your Social Security benefit.

[8:10] – Is It Better To Delay Taking My Social Security Benefits Or Take Them Early?

  • This is a classic debate. The longer you wait, the larger your benefit will be. However, who’s to say you’ll live long enough to make waiting worth it?
  • The answer to this question depends on so many other factors. Consider your other assets, your family history, and your needs in retirement.

[14:08] – Do I Have To Pay Taxes On My Social Security Benefits?

  • You might. You might not. You could pay taxes on up to 85 percent of your Social Security benefits.
  • Whether your Social Security will be taxed is dependent on the amount of other income you’re generating.
  • Making your portfolio more tax efficient can help to alleviate your tax burden.

[15:41] – What Happens To Our Benefits As A Couple When One Spouse Dies?

  • If one spouse dies, the smaller check goes away. Sometimes, we set up an extra account to replace lost income.

[17:03] – If I Continue Working In Retirement, Can I Still Collect My Benefits?

  • If you earn too much, you might incur an earnings penalty. If you earn more than $17,640 in any given year, you’ll end up having to give back some of those earnings.
  • Once you reach the full retirement age, there’s no limit on the amount of money you can make.

[18:28] – Is Social Security Going To Go Broke And Leave Me With Nothing?

  • Joel doesn’t believe the promise of Social Security will be broken for anyone over the age of 55. However, he does suggest younger folks might not be able to count on Social Security benefits in the future.
  • Retirement planning requires you prepare yourself even amidst financial uncertainty.

Final Thoughts:

“I wouldn’t worry about Social Security going broke if you’re older. If you’re under age 55 or 50, boy, I would probably make sure you’re saving enough, so that if the nature of Social Security changes, you have enough to cover yourself in retirement.” – Joel Johnson

Additional Resources:

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