Planning for Retirement
Beatrice E. Wolper
Emens & Wolper Law Firm
When planning the funds available for retirement, the question often asked is, “when shall I take social security?” And the best answer is, “it depends.” Everyone should go to the social security website and create a “my social security account.” It is easy to use, easy to find your expected monthly funds and easy to see the difference you may receive at different ages. The website is www.ssa.gov/retirement and then go to “Retirement Estimator.” Another good report is the “Retirement Tool Kit” within the SSA website. Once you create your “my social security account” you can determine the actual amount of benefits you will receive based on your personal work history.
For example, most people know that early retirement benefits can start at age 62, however there is a dollar-for-dollar offset of money received if you earn more a certain amount. That amount can be calculated on “my social security account.” Consequently, most people will wait until their “full” retirement age of 66 (or if born in 1960 or later, 67). And, unfortunately, social security benefits are taxable if your total income is more than $25,000 (if filing single) or $32,000 (if filing joint).
A person can receive more retirement funds if he or she waits until 70 (and the website can show you exactly how much more). But remember to do your math. For example, if you were to receive $1,500 per month if you take you funds at 66, and you would receive $2,000 at 70— you would have four years, times 12 months per year receiving $1,500 before the age 70; in other words you would have received $72,000. If you delay until 70, then you would be age 84 before you catch up.
The website also explains when you can sign up for Medicare. The sign up is three months prior to age 65, and the benefits begin at age 65. Everyone should be aware that there is a sign up period from January 1 through March 31. During this time, a person can sign up without penalty. Signing up out of this period may cause a 10% penalty.
Please note that all the dates and amounts listed in this summary are as of November, 2014. These may change at any time so check the social security website for accurate up-to-the-minute figures and estimates.