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What you should know about Social Security

Social Security benefits are an important part of most retirement plans. Consider these questions before you make a decision:

1. Should I take early benefits?

You can start drawing Social Security payments at age 62, but your benefits are permanently reduced a fraction of a percent for each month before your full retirement age.

Social Security records show that many recipients take the early payout.

2. At what age am I eligible to receive Social Security benefits?


Birth year:  1942 or earlier 1943 to 1959 1960 or later
Full Benefit 65 66 67
Partial Benefit 62 62 62
Late Benefit 70 70 70

These are approximate ages. The exact month you are eligible for full Social Security benefits will depend on the month and year you were born. Please see your Social Security statements or www.ssa.gov for more details.

How do you decide when to start receiving Social Security benefits?

Consider these factors:

  • Your health and your family history of longevity. If you're in good health and have a family history of longevity, you might be better off waiting. You'll have more years to draw a larger payment after your full retirement age.
  • Your employment status. If you're still working and want to draw early Social Security benefits, you might be penalized. In the year you reach full retirement age, the penalty is lessened. Once you reach full retirement age, it ends.
  • The payoff for waiting. You can delay Social Security payments up until age 70 — a move that may permanently increase your payment. The increase varies, depending on your year of birth.

3. How can I calculate my benefits?

You don't need to — Social Security will do the complex calculations for you and provide you with a good estimate. In fact, about three months before each birthday, you should get a statement that shows your estimated benefits at various ages. The statement also includes a record of your earnings that determine your benefits.

» Use the Social Security Administration's online calculator to get an estimate of benefits.

4. How will taxes affect my Social Security?

If you have other sources of income in retirement, some of your Social Security benefits may be subject to income taxes. According to the Social Security Administration, about a third of people who receive Social Security, pay income tax on their benefits.

5. What is my spouse's benefit?

A spouse who has not worked or who has a low earnings history is eligible for Social Security benefits of up to half the benefit of the higher-earning spouse. A divorced spouse can qualify for such benefits if the marriage lasted at least 10 years.

Take the next step

Mistakes in when to claim Social Security benefits can potentially cost you thousands of dollars over your lifetime. Consider asking a financial professional to help you make critical Social Security decisions.

Find out how a financial professional or advisor can help.



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