Mistakes to Avoid When Taking Social Security

Mistakes to Avoid When Taking Social Security

It seems recently that every other article I read is concerning Social Security benefits, when to take them and what options are available.

The problem arises when seeking help directly from the Social Security Administration; simply put a majority of Social Security workers are not adequately trained on the various options available or offer bad information when discussing with applicants.

Number one mistake is taking early benefits at the age of 62, assuming you are reasonably healthy. You lose at least 1/3 of your annual benefits for life if you chose at age 62 instead of your full retirement age of 66 or 67 depending on the year of your birth.

If you wait until you reach the age of 70 you will gains approx. an additional 8 % per year up to your 70th birthday.

Below is a video in quite detail about maximizing your benefits

Steps to take to maximizing Social Security benefits

  1. Planning for opportunity cost – how will withdrawals from your retirement accounts impact your portfolio and retirement in general.
  2. Consider your family history and your health – it might make sense if you have health issues or a history of family health related circumstances to take your benefits early.
  3. Do some tax planning – consider the tax implications of any specific strategy. A portion of your benefits may be taxable income for both your federal and state taxes.
  4. Review your prior marital history and clearly understand what you qualify for. If you been married for at least 10 years you might be entitled to a larger benefit by taking your former spouse’s benefits instead of your own.
  5. File and suspend – review this strategy; the higher earning spouse can file for benefits then suspend immediately allowing the monthly benefit to grow.
  6. Seek professional help to determine what strategy is best for you – there are several software tools available to help in the analysis. Do not assume that the information you get directly from Social Security is correct.

Daniel F. Iuculano, AAMS CMFC

Accredited Asset Management Specialist

Chartered Mutual Fund Counselor

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