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Social Security

 

The strategies for maximizing benefits can get complex, so be sure to get help from us, your personal financial planner/tax professional.

 

If you're really worried about the future prospects for Social Security, that's all the more reason to save more for your own retirement.  Wouldn't it be nice to consider your Social Security benefit as the icing on your retirement cake, rather than the main course?

 

"Maximizing your benefits is as important as managing your investments".  Barron's, Investing in Retirement, April 12, 2014

Three Options

When it comes to your Social Security benefits, you have three options:

 

  1. Take them early

  2. Wait until your normal retirement age

  3. Wait even longer (wait as late as age 70)

 

If you choose to start receiving your Social Security check before your normal retirement age, your benefit is reduced by five-ninths of 1% for each month before that age, up to 36 months.  Alternatively, by waiting two extra years beyond your normal retirement age, you get a credit of 8% per year.

Social Security landscape for current 25-to-35-year olds

If you are decades away from retirement, this is where things may get dicey in terms of your Social Security benefits. It is very likely that those currently entering (or relatively new to) the workforce will see a very different Social Security system than the one that's in place currently.  Unless changes are made, current 25-to-35-year olds face a greater than 25% reduction in benefits once the Social Security trust fund is gone.

 

Morale of the story: Save for retirement, and start now.

Social Security is unsustainable

"Social Security’s financing is not projected to be sustainable over the long term with the tax rates and benefit levels scheduled in current law. Program cost will exceed noninterest income in all years of the 75-year projection period. In 2033, the combined OASI and DI Trust Fund asset reserves will be depleted according to the projections by Social Security’s Trustees."

 

Source: Social Security's Fiscal Year 2013 Summary of Performance & Financial Information Report

Important information for Same-Sex couples

"On June 26, 2013, the Supreme Court ruled that Section 3 of the Defense of Marriage Act (DOMA) is unconstitutional. Therefore, Social Security no longer is prevented from recognizing same-sex marriages for purposes of determining entitlement to or eligibility for benefits. Social Security is now processing some retirement, surviving spouse and lump-sum death payment claims for same-sex couples and paying benefits where they are due. If you are in, or are a surviving spouse of a same-sex marriage or other legal same-sex relationship, we encourage you to apply right away for benefits."

 

Source: Social Security Administration

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