As you approach retirement you may feel excited about your future, or uncertain about your financial future. Or both.

Social Security is a critical retirement benefit that provides financial support for many Americans. This year, 67 million Americans will receive over 1 trillion dollars in social security benefits.1 But surprisingly, 46% don’t know how to optimize their benefits.2

Optimizing your social security benefits is an important step in preparing for retirement.

Giving the complexities involved, knowing where to start can be tricky but you can maximize your social security benefits with your financial advisor by asking these 5 questions:

  1. When do you plan to retire? The right time to retire depends on a few factors. It’s important to think about your financial resources, physical health, psychological wellness, social circles, family support systems, and the impact of claiming your social security benefits early and the benefit of delaying. Remember, the retirement age that’s right for someone else, may not be right for you.
  2. What will you earn if you claim at age 62? While you can claim social security at age 62, keep in mind that if you’re still working, you can only earn so much each year. If you earn more than allowed, your benefit payments may be reduced. The earlier you stop working, the less social security you will receive. And then, there’s the flip side. After age 62, for every year you postpone until age 70 you could receive up to 8% more in future monthly payments. We recommend working with your financial advisor to factor in your goals, whether that’s to stop working, continue in your current role or if you plan to take on new or part-time work.
  3. What are your retirement income sources? Social security benefits can give you more financial confidence but it won’t cover all of your expenses in retirement. You should plan to have other sources of income like:
    • Pension payments
    • Employment income
    • Annuity payouts
    • Business sale proceeds
    • Insurance policies
    • Inheritances
    • Savings you have built over the years
    • If you’re looking for more supplemental income in retirement, an advisor can help.
  4. What age do you plan to live to? We all aspire to live long and healthy lives, but there’s a practical element to think about when it comes to the rest of your life. To ensure retirement is comfortable and fulfilling, it’s essential to plan for financial confidence for the next 20 to 30 or more years. Think about how you want to live in retirement and how you expect your expenses to change. Life is unpredictable, and unexpected expenses can impact your retirement income. It’s important to have a plan in place to help you manage unexpected expenses and ensure that you don’t outlive your retirement savings.
  5. What are your family circumstances? Of the 67 million Americans receiving social security, around 4 million are dependents. If you still have dependent children, you claim additional social security benefits when you retire. And if you’re married, making the most of your social security may involve waiting or claiming at different ages. Couples have the option to claim 50% of their spouses benefit too. For high earners, claiming spousal benefit may be more beneficial. Retirement isn’t a one-off event. It’s a journey that spans the rest of your life and your advisor can help make it smooth and enjoyable.
  6. What Tax implications are there? Social Security benefits may be subject to federal income tax if your income exceeds certain thresholds. It’s important to understand the tax implications of your Social Security benefits and plan accordingly. Consider consulting with a financial advisor or tax professional to help you develop a tax-efficient retirement income strategy.

There are many factors that contribute to the mix of optimizing your social security benefits. These are only some of the considerations in doing so. Talk with your financial advisor today to learn more about how you can optimize those benefits and plan for retirement accordingly.


2Source: Nationwide

The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing materials are accurate or complete. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of Gainspoletti Financial Services and not necessarily those of Raymond James. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Every investor’s situation is unique and you should consider your investment goals, risk tolerance and time horizon before making any investment. Raymond James and its advisors do not offer tax or legal advice. You should discuss these matters with the appropriate professional.