Which two things don’t necessarily go together?
A. Hamburger and Fries
B. Gin and Tonic
C. Retirement and taking Social Security
D. Queso and Chips
If you said C, you win!
People often think of enrolling in Social Security and retirement as two levers to pull at the same time. Social Security benefits are not tied to when you retire. You should consider several factors before deciding when to apply for Social Security benefits. These include other retirement savings or benefits you have available to you, how long you expect to live in retirement, and whether you plan to continue working while drawing Social Security.
Here are some thoughts about Social Security to begin the conversation.
FRA (Full Retirement Age) – From a Social Security perspective, FRA (67 years of age for people born in 1960 or later) is the age at which earned income will not offset your Social Security benefit. This does not mean that you must be FRA to retire.
Age 70: Apply by age 70. Your social security benefits do not increase after age 70.
Social Security benefits are structured so that if you live to about age 78-82 you should receive the same amount over your lifetime whether you start benefits early or later.
Starting Social Security early – Starting Social Security before FRA reduces your benefits, but you'll also receive monthly checks for longer. If family history or current health imply that your life expectancy is less than the average, then it might make sense to start receiving Social Security benefits early.
Delaying Social Security - If you think you'll beat the average life expectancy and your income stream allows, it is wise to delay claiming Social Security to get a larger monthly benefit.
Your decision is important and irrevocable, which is why we prefer to counsel our clients before they sign up. Social Security recommends contacting them six weeks before you would like to receive your first check, so having your strategy in place early is beneficial. If you would like to discuss this in more detail, please let us know! This is a service we are happy to provide to our clients.
Also, please click here to view the 2022 Q1 Investment Commentary prepared by our asset management team at Northwest Asset Management.
Cass, Megan, and Bleckley