This is not your parent’s Social Security!  Tread lightly before initiating benefits.  Here are four considerations before deciding on the timing for social security benefits:

• Longevity: 

  Look at your family history and consider the likelihood of receiving benefits over time.  If you are likely to live a long life, it may benefit you to defer payment to a latter age to maximize the amount your will receive monthly.

• Employment Income: 

  This is a larger consideration than in the past.  If you take your social security benefits (SSB) early and still have earned income, you may have to repay a portion of your SSB back!¹

• Alternate Sources of Income:  

  If you are considering retiring before full retirement age (FRA) and deferring your SSB to receive a higher benefit, be sure to consider the potentially large portion of personal assets that would have to be spent.  This would be due to the gap between income sources.  Remember that SSB inflation will likely be less than your actual experience of inflation.  Those funds spent would likely be more meaningful to your ability to keep pace with actual inflation during the latter years of your retirement.

• Spousal Impact on Social Security Income:  

  Just because one spouse takes SSB at FRA, does not mean that both spouses should take benefits at FRA.  If the income need is not there, it may be more beneficial for one spouse to take benefits earlier and the higher benefit earner defer to age 70.  Remember that the higher of the two payments remain when one member of the couple passes away.  As a result, the higher income earner waiting until 70 drives up the survivor benefit.

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¹Speak with your tax adviser for specific details regarding limitations.

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Always remember that while this is an investor education piece, this does not trigger or relate to trading activity on your account with Financial Future Services.  This article is for informational purposes only and not intended as a recommendation.  Each investor's circumstances are different and a full review of your situation is necessary for a recommendation.

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