As you begin to consider easing into retirement, Social Security is probably a big topic on your mind. The first thing you should think about is when to start taking your Social Security.
There are three points at which you can take Social Security:
- Early Retirement – begins at age 62, but is a reduced Social Security benefit. This table explains how much your benefit is reduced, depending on the age you take early retirement and when you would reach full retirement. https://www.ssa.gov/benefits/retirement/planner/agereduction.html
- Full Retirement – for those born between 1943-1954, full retirement is age 66; for those born between 1955-1960, full retirement age increases gradually until age 67, for anyone born after 1960, full retirement age is 67. See the above chart to determine your full retirement age.
- Delayed Retirement – until you attain the age of 70, your Social Security benefits will continue to increase. Delaying retirement and your claim after age 70 has no additional benefit.
Spouses do not have to elect to take Social Security at the same age. A spouse who is still working, but who has reached retirement age, can file for Social Security but suspend his or her benefits. Suspending benefits allows the non-working spouse to receive spousal benefits of Social Security while the working spouse continues to accumulate credits. Filing a claim on a spouse’s Social Security rather than your own is a particularly attractive option for those whose spouse earned more and therefore will receive more in Social Security.
Because Social Security is calculated based on your income, therefore your contribution, it’s likely that working longer will have a greater impact on your Social Security benefit, as you likely are making more at the end of your career than you were at the beginning.
Regardless of which age you decide to claim your Social Security, do make sure you sign up for Medicare at age 65. Delaying signing up for Medicare, even if you wait for delayed retirement for Social Security, can have negative consequences.
Social Security Income (SSI) from retirement is not the same as Social Security Disability Income (SSDI). If a disability has forced you to retire early, be sure to apply for SSDI (see our blog Differences Between SSI and SSDI).
Part of planning for retirement is also making sure your estate plan is up to date. It’s time to dust off that old Will, power of attorney, and living will and update them. The law on Financial Power of Attorney documents and Health Care documents has changed significantly just within the last 5 years. At Grissom Law we work with our clients to create holistic plans, from helping answer Social Security questions to Medicaid Trusts, to a simple Will.
Disclaimer
This Blog/Web Site is made available for educational purposes only as well as to give you general information and a general understanding of the law, not to provide legal advice. By using this blog site you understand that there is no attorney client relationship between you and Grissom Law, LLC.