If Social Security is on your radar, you’ve probably heard the conventional wisdom that it’s helpful to delay you filing as long as possible. The reason for delaying is that the longer wait to file, the higher your benefit will be.
You can file as early as age 62. However, your full retirement age (FRA) is probably between your 66th and 67th birthdays. If you file before your FRA, your benefit is reduced by up to 30 percent. The reduction is permanent, so it can have a big impact on your retirement income.
Retirement is supposed to be about enjoying the good things in life. It’s a time to travel, pursue a favorite hobby, and spend time with family. After all, you’ve worked hard for decades to accumulate assets. Retirement is your time to enjoy the fruits of your labor.
Of course, saving money and getting to retirement is only half the battle. After you leave the working world, you will still face risks that could threaten your financial stability. Without a plan to manage those risks, your retirement may not be as comfortable as you would like.
As you transition into retirement, you’ll face many big decisions. One of the biggest will be when and how to file for Social Security benefits. It’s an important decision, as Social Security may play a large role in your retirement income plans.
Your decision about when to file is also important because it’s permanent. In most cases, your Social Security benefits cannot be altered or adjusted after you file and begin receiving benefits. Your payment may increase because of cost-of-living adjustments, but you can’t change your filing after the fact to increase your benefits.
Consistent, stable income is at the heart of any financially stable retirement. In many ways, your financial health in retirement depends on your ability to generate income that exceeds your expenses. Your income will likely come from a variety of sources, including Social Security, savings and investments, and possibly even a company pension.
There could be times, though, when those income sources don’t cover all your expenses. You could face emergency costs or volatile market swings could limit your income. In those times, you may find it helpful to utilize supplemental income, preferably in a tax-efficient manner.
Carstens Financial Group focuses on providing comprehensive asset management, estate planning and life insurance solutions. Allow us to help you secure your financial future.