At first glance, you may not think that work and retirement mix. After all, retirement is all about leaving the working world. How can you enjoy your newfound freedom and lifestyle if you’re still working?
 
Working doesn’t have to mean giving up your freedom, though. You could work part time or seasonally. You could work as a coach, consultant or trainer and manage your own schedule. You could even freelance or drive for a ride-sharing company.
 
No matter which route you take, there are serious benefits to working in retirement. Obviously you get supplemental income, which could help you maintain your retirement assets and enjoy greater financial stability. Work could also provide socialization opportunities and help you meet new friends.
 
There are also a few considerations that you shouldn’t ignore. Are you healthy enough to work in retirement? What kind of schedule would allow you to still enjoy your retirement? And perhaps most important, how will the extra income affect your Social Security benefits?
 
Social Security is an important resource for retirees. In fact, nearly 90 percent of all Americans age 65 and older rely on Social Security for income.1 If you’re like most, Social Security will play an important role in your financial picture.

Does work impact your Social Security benefits? It depends on a number of factors, including your earnings and your age. Below are a few important guidelines to keep in mind as you plan your retirement strategy:

Before Full Retirement Age (FRA)
 
The earliest you can file for Social Security is age 62. You can file at this age even if you are still working. Regardless of whether you’re working, however, filing before your FRA could lead to a big reduction in your benefits, perhaps as much as 35 percent.2 Despite the potential reduction, many people choose to file for benefits as soon as they’re eligible.
 
The benefit reduction could be compounded if you file early and choose to work. Before your FRA, you can earn up to $17,040 in a year without seeing a reduction in your benefits. After you cross that threshold, however, your benefit is reduced by $1 for every $2 you earn. If you plan on continuing to work, think carefully about whether it makes sense to file for Social Security.3

Year of Your FRA
 
Most people’s FRA lands at some point between their 66th and 67th birthdays. The actual month depends on your date of birth. You don’t technically reach your FRA until that month arrives.4
 
Once you reach the year of your FRA, Social Security makes an adjustment to the work reduction. In that year, you can earn as much as $45,360 without seeing a reduction. Keep in mind that those are your maximum earnings up to the month in which you reach your FRA. After you cross the threshold, your benefit is reduced by $1 for every $3 you earn.

After Your FRA
 
In the month you reach your FRA, you can start working with no benefit reduction and no earnings limit. You can earn as much as you want and still receive your full Social Security benefit. At this time, Social Security also recalculates your benefit amount and excludes any months in which your benefit was previously reduced because of earnings penalties.
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.

 
1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/planners/retire/agereduction.html
3https://www.ssa.gov/planners/retire/whileworking.html
4https://www.ssa.gov/planners/retire/1943.html
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17848 – 2018/7/30

​ 
If you’re approaching retirement, you’re probably starting to think about Social Security. It’s a valuable program that plays a large role in most retirees’ financial picture. It will likely be an important resource for you. But how much do you actually know about Social Security?
 
Below are a few interesting facts about the Social Security program. As you approach retirement, take time to research your Social Security options so you can make an informed decision about your benefits.
 
Nearly every American over 65 receives Social Security income. According to the Social Security Administration, 9 out of 10 retirees rely on Social Security for income. It also provides income to more than 10 million disabled workers and 6 million survivors.1
 
Many retirees rely heavily on Social Security for income. Nearly a third of all retiree income comes from Social Security benefits. Almost half of all retired married couples and 71 percent of single retirees rely on Social Security for more than half of their income.1
 
Today’s retirees are living longer than past generations. Social Security started paying regular monthly benefits to retirees in 1940. At that time, a 65-year-old could expect to live for another 14 years. Today a 65-year-old is expected to live an additional 20 years. The number of retirees over age 65 is expected to increase from 49 million today to more than 79 million by 2035.1
 
Social Security provides increases to match inflation. Social Security offers cost-of-living adjustments (COLAs) to help retirees keep up with inflation. However, the adjustment isn’t guaranteed and may not happen every year. In 2017 the increase was 2 percent. In 2016 it was 0.3 percent. There was no increase at all in 2015.2
 
Social Security COLAs may not accurately reflect health care costs. Social Security COLAs are based on the consumer price index (CPI). However, the CPI doesn’t account for the fact that seniors spend more on health care than the overall population. Thus, the CPI may not weigh medical costs in a way that’s reflective of retirees’ true costs. The result is that Social Security COLAs haven’t kept up with health care inflation in 33 of the past 35 years.3
 
There’s a maximum Social Security benefit. The maximum Social Security benefit is currently $2,687 per month, but it’s adjusted regularly based on inflation. You probably don’t need to worry about the cap, though. The average benefit amount is just over $1,300 per month.3
 
You can file for benefits as early as age 62. Many people choose to file for benefits as soon as they’re eligible. If you file before your full retirement age (FRA), however, you could see a permanent reduction in your monthly benefit. Most people reach their FRA between their 66th and 67th birthdays. If you file before your FRA, your benefit will be reduced, perhaps as much as 35 percent.4
 
You can increase your benefits by delaying your filing past your FRA. You may wonder why anyone would delay Social Security benefits. The main reason is because Social Security offers an 8 percent benefit credit for each year past your FRA that you delay your filing. The latest you can delay your filing is age 70. If your FRA is 66 and you wait until age 70, your benefit could increase as much as 32 percent.5
 
Social Security deficits will begin in 2020. We’re only a few years away from Social Security starting to run annual deficits. That means the program will pay out more in benefits than it brings in through payroll taxes. Without changes, the Social Security trust fund will be completely depleted by 2034.6
 
But that doesn’t mean Social Security will be gone anytime soon. It’s possible that Social Security could last to 2090 even if the trust fund is depleted in 2034. However, doing so may require a 21 percent cut in benefits across the board.
 
Ready to plan your Social Security strategy? Let’s talk about it. Contact us today at Carstens Financial Group. We can help you analyze your needs and develop a plan. Let’s connect soon and start the conversation.
 
1https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
2https://www.ssa.gov/oact/cola/colaseries.html
3https://www.fool.com/retirement/2016/12/04/25-social-security-facts-figures-you-need-to-see.aspx
4https://www.ssa.gov/planners/retire/agereduction.html
5https://www.ssa.gov/planners/retire/delayret.html
6https://www.fool.com/retirement/2017/05/22/a-big-social-security-change-is-coming-in-2020-and.aspx
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
 
The material is not intended to be legal or tax advice. The insurance agent can provide information, but not advice related to social security benefits. Clients should seek guidance from the Social Security Administration regarding their particular situation. The insurance agent may be able to identify potential retirement income gaps and may introduce insurance products, such as an annuity, as a potential solution. Social Security benefit payout rates can and will change at the sole discretion of the Social Security Administration. For more information, please consult a local Social Security Administration office, or visit www.ssa.gov
 
17846 – 2018/7/30

​It’s a dilemma for anyone approaching retirement. When should you file for Social Security benefits? The general wisdom is that it’s better to delay your filing as long as possible. The longer you wait, the higher your benefit is likely to be.
 
Despite the fact that waiting leads to increased benefits, most people do not wait to file their claim. In fact, nearly 90 percent of all eligible Americans file a claim for Social Security at or before their full retirement age. The most common filing age is 62, which is the earliest point at which one can claim benefits.1

​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.

​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.