A common question of many of our estate planning clients is when to begin collecting social security benefits. A related question is whether continuing to work will affect their social security benefits.
When considering the age to begin collecting social security, there are many factors to consider, including the following:
- Will you continue to work?
- Will your benefits be taxed?
- What other sources of income do you have?
- What is your life expectancy?
If you plan to continue working and you begin collecting your social security benefit prior to reaching full retirement age, your social security benefit may be affected temporarily if you earn more than your earnings limit for the year. You can work after reaching your full retirement age without a reduction in your benefit and continuing to work may increase your benefit amount because social security benefits are recalculated each December based on your 35 highest-earning years of work.
If your income (50% of your social security benefit plus other earned income) exceeds $25,000 for an individual or $32,000 for a couple filing joint, you may pay federal income taxes. Whether the amount will be taxed should be considered as you plan for retirement.
If you have other sources of income, it may make sense to wait until full retirement age to collect benefits or even to wait until reaching age 70 to do so. If you wait to begin collecting beyond full retirement age, you will earn “delayed retirement credits” that will increase your benefit by 8 percent for every year you wait for those born after 1943; however, no delayed retirement credits are earned after age 70.
Another consideration is your longevity or life expectancy. When considering the age at which to apply for social security benefits, life expectancy should be considered. If you have longevity in your family and other sources of income, it may make sense to wait until full retirement age or even 70; however, if you don’t, claiming the benefit sooner may be the better option for you.
At Grissom Law, we work with families and individuals to understand their needs and prepare estate plans that address current as well as future needs. If you or a loved one needs Last Will and Testaments, Revocable Living Trusts, Irrevocable Trusts to qualify for Medicaid, or other estate planning, call us today at 678.781.9230 to schedule a time to meet and discuss your needs.
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.