Dear Bernard,,

Do you understand how Social Security works? Maybe you feel it's one of life's mysteries; like solving a Rubik's cube or deciding which TV streaming service to use. You know there is an answer to these questions like these, but it may just elude you.

As we lead relationships into retirement or toward retirement, when and how to take this income stream is one of the most common questions we get. We have found that there are so many misconceptions.

While you will be eligible to receive benefits at age 62, should you wait until your full retirement age? Should you delay even longer, until age 70? What if you have decided to collect Social Security income and earn more than the wage limit?

Some of the general guidelines you can use are these:

• If you decide to collect social security income before your full retirement age you can expect an 8% per year decrease from your full retirement benefit. This 8% decrease per year is permanent.
• Each year beyond full retirement age, up to age 70, that you delay taking social security income, you receive an 8% permanent increase in your benefits.
• If you are receiving benefits before full retirement age and earn a wage over the earned income limit, you have a $1 reduction in benefits for every $2 over the limit you earn. However, the reduction is NOT permanent, but is used to recalculate your benefit once you reach full retirement age.

I am sure much of this is clear as mud.

What may be of great help is to think of Social Security income as a lifetime annuity. The longer you wait to turn on the income, the greater the value of the annuity is.

It is also important to look at the actual goal of when you receive your retirement benefit. If you plan to stop working full time early, taking benefits before your full retirement age may help support your standard of living. These benefits, while a reduction in the dollar amount, may take stress off your other assets. Said another way, even though you receive a reduced benefit, the income that you receive may allow you to not have to spend other money you have saved (or to spend less).

If this creates more questions for you than answers, we encourage you to reach out to us. We have access to many tools such as Social Security income analyzers, decision tools on when to file for benefits, claiming guides for Medi-Care, guides about how spousal and survivor benefits work as well as others.

Like any tool, if it is not used it is worthless. We have gathered these tools to help you make informed decisions. Please let us provide guidance to you where we can.

As always, thanks for reading.

Bernie & Chad