Wondering about Social Security

Hello friends, 

So, your 62nd birthday is coming up. Maybe you’re wondering should I start collecting Social Security?

If you’re still working full-time, or if you file taxes with your spouse and they are still working, it may not make a lot of sense.

Why? Because when taking benefits EARLY $1 of benefits is deducted from your Social Security benefit for every $2 of earnings over $16,920 (a). So, you’re going to end up paying a lot of your benefit back in taxes.

BUT there is a more important factor. People are increasingly living longer, so when making financial decisions it is important to consider what happens if you live to be 95 or 100 years old.

According to the government (b) the number of people over 90 tripled between 1980 and 2010. With the upcoming census, these figures are sure to increase.

If you turn 62 in 2020 and you begin Social Security, your benefit will be reduced by 28.33% according to the government. Once you start it, that is the way it is (a).

If you were going to collect $1,000 at full retirement age and began taking at 62, you would receive $716.70. That is a loss of $283.30 per month (a).

But let’s say you were able to wait until full retirement age and collect the full payment.

According to my calculations, if you invested the difference of $283.30 and earned a compounding 4% return for 30 years, that $283.30 per month would grow to $199,211.86.

When making decisions about whether to draw your benefit early, think about it as a potential $199,211.86 decision.

Everyone’s financial situation is different, but delaying Social Security for as long as possible can often seem like a good idea. When making decisions about drawing Social Security it’s a good idea to speak with a qualified tax advisor. 
Until next time,

David C. Treece,
Financial Adviser

PS: If you have questions about Social Security or ways to invest your money in retirement to make it last into your 90s and beyond, just respond to this email, and we’ll reach out to you. 

a. https://www.ssa.gov/planners/retire/agereduction.html
b. https://www.thoughtco.com/living-past-90-in-america-3321510 
Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and Clients Excel, LLC are not affiliated companies. Our firm is not affiliated with the U.S. Government or any governmental agency. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. 447672

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