Social Security is a Matter of Timing

By Harriet Hoffman, Make the Right Choice

Social Security is a Matter of Timing - Howard Lipset, CPADeciding when to begin receiving Social Security benefits can be a major life decision. It can impact your long-term financial security, your retirement prospects and your federal tax burden, or it can provide an immediate and welcome lifeline.

On the surface, when to take your benefits looks like a no-brainer. You can begin collecting any time between age 62 and 70.  Full Social Security age is 66. So if you want or need those monthly payments, many people would advise you to grab the money as soon as possible. If you don’t need the money the common wisdom says wait until you are full Social Security age (for baby boomers that age is 66) and then you will collect for more years than if you wait until the maximum age of 70. If you don’t have other assets, wait until 70 to get more guaranteed-annuity income. This over-simplified guide leaves out the myriad of factors that need to be considered if you are to make the most of the benefit that you have earned and that for many will play a significant role in your future financial security.

Work and marital status are just two of the many important factors that should play into your decision. Social Security can be a tremendous benefit to someone who is unemployed or eager to retire, but if you are still working you must know the rules for how much you can earn and how your benefits will be taxed. Collecting too early can end up reducing not only your lifetime payments but those of other family members. On the contrary, if you are part of a couple you have opportunities to significantly maximize your joint total lifetime benefits if you know the timing “tricks.”

So take a measured look before you leap!

Harriet Hoffman provides individual consults to help baby boomers and the 65plus generation understand and make the most of their Medicare and/or Social Security benefits.  For more information:

Howard Lipset, CPA
Progressive Management, Inc.
(516) 883-2962

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