You just turned 62 and you're all amped up to start receiving that social security check you've been waiting your whole work life for. Well, before you take the plunge and submit the application to start your benefits, here are a few reasons you may want to wait....
- Earnings Test - If you're still employed and under FRA (full retirement age) you could lose half of your social security benefits if your income exceeds $22,320. Any income in excess of that will reduce your social security benefits $1 for every $2 over the threshold. Earnings refers to, what I call "blood, sweat and tears" money. Money you worked for such as a W-2 or Profit from a business on a schedule C, it does not include investment income or withdrawals from retirement accounts.
- Spousal Benefits - Typically, if one spouse were to predecease the other, the living spouse would lose the lesser of the two social security benefits and keep the larger. So, if your benefit would be larger, by delaying social security, you would be providing a larger potential spousal benefit.
- Deferred Retirement Credits - You could receive an 8% annual increase to your benefits by delaying up to age 70. But after 70, no additional benefits would accrue. If you have a longer than normal life expectancy, delaying as long as possible would provide the largest lifetime benefits.
These are just a few reasons you may want to delay benefits. But ultimately, the best strategy depends on your own personal financial situation, health and retirement goals. If you're unsure whether starting social security now, or waiting makes more sense, give us a call?