Elder Care Social Security Retirement Planner

by Ira M. Leff, Esq.


August 11, 2008

Have you ever thought about when the optimal time is to start drawing your Social Security benefit?  If you draw it before your Full Retirement Age (FRA), you receive a reduced benefit for the rest of your life.  If you defer it to age 70, you receive an enhanced benefit for the rest of your life.

In making this decision, bear in mind that if your income is over $25,000 for a single person or $32,000 for a married person, some of your Social Security benefits will be subject to income taxation.  Also, be advised that if you draw Social Security before Full Retirement Age, your benefit will be reduced if you earn over $13,560 per year, until you reach FRA.

So, why would anyone choose to start their distributions early?  Because if you don't live a long life, you will receive more by doing so.  

For example, my father chose to defer his Social Security benefits until he was age 70, since he was still working.  Unfortunately, he died at age 73.  Had he chosen to start his benefits at age 62, he would have received 80 percent of his normal benefit, or about 60 percent of his age 70 benefit.  But he would have received it for 11 years, instead of just three.

Here are three handy charts which should help you decide when to start drawing your Social Security benefit.  I have recently completed preparing a retirement seminar for a large Atlanta law firm.  If you know of other organizations interested in such a program, please ask them to contact me.

SOCIAL SECURITY BENEFITS

Birth Year FR Age
FR Ben
Age 62
Age 70
1937 or Before
65
$1,000 
$800
$1,325
1938
65.2
$1,000
$791
$1,314
1939
65.4    
$1,000
$783
$1,327
1940
65.6
$1,000
$775
$1,315
1941
65.8
$1,000
$766
$1,325
1942
65.10
$1,000
$758
$1,313
1943-54
66
$1,000
$750
$1,320

 



TAXATION OF SOCIAL SECURITY BENEFITS

Marital Status  
$25,000 $25,000 to $34,000  > $34,000
Single   0 %   50 % 85 %

                                     

Marital Status  
$32,000 $32,000 to $44,000  > $44,000
Married   0 %   50 % 85 %



SOCIAL SECURITY EARNINGS TEST

Age
Income
 Reduction
Under FRA
+ $13,560/yr.
$1 for $2 earned
Year of FRA
+ $36,120
$1 for $3 earned
FRA
No Limit
No Reduction

Please click on any of the categories below to read more related Elder Law Minutes.

Applying for Medicaid
Asset Protection
Financial Planning
General
Legal Documents/Issues
Medicaid
Medicare
Nursing Homes/Asstd. Living
Tax Issues
Trusts
Veteran's Benefits

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