Everyone’s financial situation is different. Loan status, job situation, and the age of your kids all significantly impact your financial situation as you approach retirement. When it comes to Social Security there are a lot of different factors to consider, and the right path forward may not be apparent to you. Just because someone else made a similar financial move that worked doesn’t mean it will work for you. That’s why counseling with a financial professional can help you find clarity in your financial situation. Here are just a few things that you may want to discuss with your financial advisor:
1: Deciding when to claim Social Security
This is the most important part of claiming Social Security benefits. It’s also the most difficult to determine. Knowing the optimal time to claim requires a firm understanding of how Social Security is calculated and what your needs will be going into retirement.
2: Understanding how Social Security is calculated
There are many rules to how Social Security is calculated. It changes based on your birth year, when you decide to claim, and many other rules. The payouts are also adjusted yearly based on inflation. Being aware of these factors can help you calculate the best time to claim your benefits.
3: Don’t forget that Social Security is taxed!
Social Security is taxed as income. This means that the government considers Social Security part of your yearly income and will tax it as such. Don’t forget that when you construct your projected take-home income!
4: Consider the role of work in your retirement
Working during your retirement may be something you want to do, or it may be something you need to do. Either way, working can be an essential piece of your retirement plan. Working can also affect your Social Security payouts, so make sure you’re aware of how working will affect your Social Security.
5: How to plan for YOU
It can be easy to go along with what everyone else is doing, especially if you’re unsure about what you’re supposed to do. Social Security is a difficult topic, so you may just defer to generic advice you find online. It’s not impossible that generic advice can have value, but chances are, it doesn’t perfectly address the complexities of your unique situation. If you realize there’s more to Social Security than you thought, consider reaching out to one of our professionals today for a complimentary review of your finances.