As we approach retirement, many Americans assume that a quick visit to the Social Security Administration is the commonsense way to get started with their retirement benefits. However, the SSA does not offer any practical financial advice beyond explaining your monthly benefit options, so getting the most out of this valuable benefit takes a bit of advanced planning.
Social Security comprises a major element of retirement income. (Two other primary sources are personal savings/investments and pensions.) But this benefit can be complicated. The goal usually is to maximize lifetime income, as every additional dollar you can wring out the Social Security Administration is one dollar that can stay in your own retirement nest egg until needed.
The rules that govern Social Security are complicated. The SS web site (www.SSA.gov has helpful guidelines, but it can be challenging to accurately apply them to your specific situation. That’s why planning and knowledge are essential. Under the right circumstances, for example, a retiree could collect a spousal benefit, allowing their own benefit to increase, and then switch to their own benefit at the optimal time.
More commonly, retirees will want the income stream from Social Security to effectively interact with other retirement income – from a 401(k), for example, in the most tax-efficient manner. Taking qualified assets into income can be a potential tax minefield: every dollar from a qualified distribution is typically taxed as ordinary income. Further complicating matters: if you exceed certain income thresholds, a portion of your Social Security income can be subject to income taxes as well – up to 85%! Most – but not all – sources of income count toward these thresholds, which are based upon a Modified Adjusted Gross Income (MAGI) calculation. Keeping MAGI in check has other advantages as well – it could lower premiums paid for Medicare Parts B and D for retirees with high incomes.
So how can you arm yourself with the knowledge you need? The Financial Planning Center, LLP is currently offering a personalized Social Security Maximization Report to qualified individuals. For a limited time, you can now unlock the details you need to know about this important benefit. This complimentary report – a $195 value – may also offer guidance on how to optimize the rest of your retirement assets to work in conjunction with your Social Security benefits.
For more information, visit www.BiggestBenefit.com.
Financial Planning Center, LLP is not affiliated with or endorsed by the Social Security Administration or any government agency. This content is for informational purposes only and should not be used to make any financial decisions.
Financial Planning Center, LLP www.fpc.money.