Believe it or not, your financial situation and circumstances are unique. Factors such as debt, your health, the age of your children if you have them, and other seemingly disparate factors profoundly influence your financial standing as you near retirement. The advantage of having a financial professional working with you is their ability to consider and monitor factors that can impact your financial future and collaborate with you to formulate a plan custom-made for your needs and goals. A key piece of that plan is how you factor in your Social Security situation.
You might be surprised at how complex Social Security planning can be. Here are a handful of questions that a financial professional can help you address:
1: When should I claim?
Deciding when you claim Social Security is one of the most difficult things to determine when it comes to Social Security planning. The ideal time to claim hinges on a solid grasp of the Social Security calculation process and an accurate assessment of when a realistic time to retire is and what level of income you’ll need when you do so.[1]
2: How is Social Security calculated for me?
The calculation of your Social Security benefit accounts for various factors. The year of your birth, the timing of your claim, your average income level, and other conditions are metrics that influence your benefit amount.[1] The benefit level is then adjusted yearly to accommodate inflation through a mechanism known as the Cost-of-Living Adjustment.[2] Having a comprehensive understanding of these elements enables you to determine the most opportune moment to claim your benefits.
3: How is Social Security taxed?
The government views Social Security as taxable income.[1] Essentially, this means your Social Security income is seen as part of your annual earnings and will be taxed accordingly. Keep this factor in mind when you’re formulating your financial strategies!
4: How will working affect my Social Security?
Whether you choose to work during your golden years out of desire or necessity, it can form a crucial part of your retirement strategy. However, bear in mind that your decision to work could have implications for your Social Security benefits. Therefore, it’s vital to understand how working in retirement may influence your Social Security payouts.[1]
5: Do I need a personalized plan?
Sometimes it’s simpler to follow the crowd, particularly when you’re uncertain about your own course of action. The subject of Social Security can be complex, leading many to rely on general guidance or what worked for their friends and family. While it’s not impossible to find value in generic advice, it may not perfectly address the complexities of your unique situation. If you realize there’s more to Social Security than you thought, we encourage you to contact one of our experienced professionals for a no-charge evaluation of your financial situation.
