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How to Strategize Your Social Security Benefits Thumbnail

How to Strategize Your Social Security Benefits

Social Security

As life expectancy has grown, your retirement now can last between 20 and 30 years. So Social Security planning is critical. No matter how much money you have, it can make a difference of hundreds of thousands of dollars. For example, if you retire at age 62 and pass away at age 86, you'll receive at least 25% less for 24 years. But if you wait to retire at age 70, you'll receive 32% more for 16 years. If your retirement income at age 66 was 2,000 dollars per month, this could be a difference of over 200,000 dollars during your lifetime. Arriving at a decision on when to retire is not easy.

If you retire early, it could affect your spouse's benefits and wages and other taxable income could cause up to 85% of your Social Security benefits to be exposed to income taxes. Proper planning takes all of these factors into account to determine a Social Security strategy. For instance, a repositioning of assets could reduce taxable income and provide for more reliable monthly income with over 500 different combinations of factors affecting benefits. It makes sense to talk to a financial adviser and get it right.