Ahh! Finances! Yes, we know that talking about money isn’t always fun and can be pretty stressful at times. Particularly when you’re planning out your retirement and determining the best way to fund it. For most seniors who are approaching retirement, the big question on their minds is: “When should I start taking my Social Security benefits?”
(In case you were wondering, we at Melrose are not licensed financial experts, so please take everything we say with a grain of salt. These are just some things to think about so you can have an informed discussion with your financial advisor.)
For many, Social Security is the foundation of a strong retirement plan because it’s a guaranteed income. Who doesn’t love that? However, as you know, when you decide to claim your benefits can have significant effects on your retirement lifestyle. So what’s right for you? Should you start claiming as soon as you can, or wait to full retirement age, or wait until you can “max out” your benefits?
Yeah…off the cuff, we don’t know, either. (Again with the “not licensed financial experts” thing.) However, there are some things to think about when you’re looking at Social Security and how it meshes with your other assets.
Your life expectancy.
Not to be morbid, but understanding family history and your personal health can help you sketch out an idea of how long you can expect to live. If you come from a long-lived line of hardy folks, you may consider delaying benefits. On the other hand, if you have a serious health condition, you may want to claim as soon as possible so you can put that money to good use.
Your available options.
Your benefit options, that is. The Social Security has calculators you can use to analyze your projected income depending on when you start to take it. This can give you a picture of your broader financial picture and can help you make clearer decisions.
Spousal benefits.
As of right now, married couples have more options than single individuals when it comes to benefits. Spousal benefits can allow a couple (if they were born on or before January 1, 1954) to draw a restricted amount and then switch to a higher benefit amount at the age of 70. We won’t even begin to try and explain it – but a licensed financial advisor can help you determine if you’re eligible and if it makes sense.
Other retirement income.
Do you have a pension? 401(K)? Money from selling a home? Make sure you have a clear picture of your entire financial portfolio so that you can make an educated decision about when Social Security will work best for you. Based on the info, you may want to delay retirement, or look for a part-time job during retirement to help supplement your income.
Finances are a complex beast, but a little bit of planning can save you a lot of hassle down the road. Once you have a clear picture of your financial profile – and how Social Security fits into that picture – you can better have peace of mind moving forward. (And that truly is priceless.)
Comments