Social Security Planning

Social Security PlanningAs retirement approaches, many wonder when they should begin taking Social Security benefits. The answer varies quite a bit depending on several factors, including when they plan to retire and what lifestyle they plan to lead after leaving the workforce. Empirical Wealth Management helps clients understand the risks and benefits associated with timing the start of taking Social Security benefits by discussing the important factors to consider and offering strategies to maximizing benefits.

Social Security in a Nutshell

Established in 1935, Social Security is a federal program, funded through payroll taxes, that provides a degree of economic security for the elderly, for people with disabilities, and for those who have had a spouse pass away. Over the next 15 years, millions of Baby Boomers will file for Social Security. They all will have three courses of action:

  • File early
  • File at normal retirement age
  • Delay past normal retirement age

Lifetime Social Security payments are determined by life expectancy, based on actuarial projections. The current “official” retirement age is 66. Retirees, however, can begin taking benefits as early as 62 or wait until they are 70. (Waiting beyond 70 offers no additional benefit.) Keep in mind, the earlier you draw Social Security, the smaller each check will be since you will receive more payments over the course of your lifetime. Conversely, by delaying benefits you will receive significantly higher monthly checks.

We think it’s a good idea to start planning your Social Security strategy with a financial advisor in your mid to late 50s. While your plan may change as you near retirement, establishing your Social Security retirement goals now will help secure your future financial and mental well being.

To get started, contact us to schedule a free, no-obligation consultation today.

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