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Planning for Social Security before the age of 62 is crucial for ensuring financial stability during retirement. Social Security benefits form a significant part of most retirees’ income, so understanding the options and the implications of early or delayed claiming is essential. Hi, I’m Alex Wolfe, Certified Financial Planner and Head of Financial Planning at Base Wealth Management.
Understanding the intricacies of Social Security and when to apply can be a daunting task for many people and it is a very important step for retirees or for those coming up on retirement. Social Security benefits are designed to replace a portion of your pre-retirement income based on your highest 35 years of earnings. So for that reason, planning before signing up 62 is important. retirement age or FRA. Your FRA is the age at which you are entitled to 100% of your Social Security benefit. For those born between 1943 and 1954, the FRA is 66 and it gradually increases to 67 for those born after 1960. Three, evaluating your financial needs.
Early planning allows you to assess your financial needs and determine the optimal time to start receiving benefits. It also gives you the opportunity to explore other retirement income sources. Before applying for Social Security, there are several factors that need careful consideration.
1. Health and longevity. Your health status and family history of longevity can influence your decision. If you expect a longer life, delaying benefits might be more advantageous.
2. Employment Status If you plan to continue working past age 62, it’s important to understand how earning official income can impact your Social Security benefits. There are earning limits that if you exceed beyond reaching FRA can temporarily reduce your benefits.
3. Financial Situation Assess your savings, investments, and other income sources, if you have sufficient resources, you might choose to delay your benefits to maximize your monthly payments. There are even important considerations whether you are single or a married couple. If you are a married couple, how does the death of one of your spouse affect your social security benefits? You may even now be single but eligible to receive your ex spouse’s benefits.
As you can see, there are very important details to navigate before enrolling. We can help guide you through these steps and help you make an informed decision on when to apply and how to apply. Please use the link below or give us a call to schedule a meeting to start planning your Social Security benefits.
