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Your Best Options to Collect Social Security

Posted December 12, 2012 in Advice Column, Greene County

With so much in the media about Social Security, the concern for its solvency and the need for reforms to preserve it for future generations, many Americans may be wondering “Will Social Security still be around when I retire?”

In its most recent report, the Social Security Administration projects that by 2033, program  revenues will no longer support payout of 100 percent of benefits promised under the law, and benefits could be reduced by 22 percent if Congress does not enact reforms. So for Baby Boomers making plans for their retirement, the instinct may be to run straight to the Social Security office to file as soon as they are eligible.

But making a hasty decision may not work in your long-term best interests. It could be well worth your while to wait — for each year you hold off on collecting Social Security after reaching your full retirement age, you receive an 8 percent increase in benefits. By age 70, that could mean a full third more income. Still, there are many factors to consider that might influence your decision about when to claim. Let’s look at the facts.

• Collecting early. If you start collecting at age 62, your benefit is reduced about one-half a percent for each month you start your Social Security ahead of full retirement age (FRA).¹

• Continuing to work after you file. If you work and start receiving benefits before your FRA, your wages will be subject to an earnings test. As long as you earn less than the annual limit (in 2012, the limit is $14,640) you keep your full benefits. Beyond that limit, $1 in benefits is deducted for every $2 in earnings.¹

• Considering life expectancy. Take into account your health, family history, exercise, drinking, eating and driving habits. If you are not in good health, it may make sense for you to begin collecting benefits as soon as possible.²

Spousal benefits, opting to claim and suspend and restricting an application are some of the other things to consider.

Can I be of assistance? When you claim Social Security can significantly impact your financial security and the opportunity for a more comfortable retirement.

1) Social Security: Understanding the Benefits, Social Security Administration, 2012. 2) Janet Novack, “The Big Decision: When to Take Social Security,” Forbes, Feb. 15, 2011.

ICA does not provide tax advice.  Investment Centers of America Inc. (ICA), member FINRA/SIPC and a Registered Investment Advisor, is not affiliated with Home State Bank. Securities, advisory services and insurance products offered through ICA and affiliated insurance agencies are *not insured by the FDIC or any other Federal Government agency *not a deposit or other obligation of, or guaranteed by any bank or their affiliates *subject to risks including the possible loss of principal amount invested.

The information is this report has been obtained from sources considered to be reliable but we do not guarantee that the foregoing material is accurate or complete. This article may not be reproduced or made available to other persons without the express consent of ICA. 

Information provided by Timothy J. Heisterkamp, Investment Centers of America, 115 W. State St. Jefferson;  515-515-386-2570.

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