Before You Take Social Security…Do These 3 Things

When Should I Take Social Security…62? 67? 70?

Before you make your irrevocable Social Security filing decision you should do these 3 things:

  1. Read our Social Security Guide
  2. Request a Social Security timing assessment
  3. Use our “simple” Social Security timing quiz to get a sense of your timing. Remember however, as with any simple calculator, this quiz provides a direction to head in, but you’ll want a full assessment (coupled with other retirement variables in the assessment) to get an exact determination of this valuable benefit.

In our guide, you’ll learn:

  • Social security basics
  • Strategies for maximizing your benefit
  • Why taking Social Security at 62 may not be best option
  • How to limit taxes on your benefit
  • Strategies to maximize spousal benefits for married couples
  • The role of Social Security in a guaranteed income plan

Will Social Security Be Around When I’m Ready to Retire?

Social Security has had it’s share of changes over the years causing pause to those of us preparing for retirement. Up to 33% of your retirement income will come from Social Security so it’s a big concern when thinking about the future of this valuable benefit.

Social Security History

Social Security was started in 1935 as a means to provide an income benefit to older Americans who had little to no means of support. The country needed a social program to help these people and the economy.

Since this time, many changes have occurred giving rise to our collective concerns.

  1. The number of workers paying into Social Security (which funds the current benefit payments), has fallen from over 8 workers for every retiree in 1955, to 2.8 workers in 2015. That ratio is expected to fall to 2.3 by 2030. (1)
  2. Social Security morphed into an income program to include disabled workers and surviving family members. These added obligations (above and beyond contributions made by working Americans) were not matched with the required payroll deductions to financially support them.
  3. People are living longer…a lot longer. As can be expected, medical advancements and a consciousness to live healthier are leading to longer retirement spans, putting even greater strain on the system.

Since 2010, Social Security tax and other non-interest income haven’t fully funded the program’s cost. According to the Social Security Trustees 2016 annual report, this pattern is expected to continue for the next 75 years; the report projects that the trust fund may be exhausted by 2034, absent any changes. Should this happen, it’s estimated that current deductions may only be able to pay about 75% of promised income benefits. (2)

The crisis is real folks, however, history has shown us that the system will have some type of reform by our government officials. Under consideration are a number of ways to bring stability to the system, and to guarantee future benefits to all. These include:

  • Raising the Retirement Age: This has been done in the past to accomplish similar goals, and would save money by paying benefits to future recipients at a later age.
  • Increasing Payroll Taxes: An increase in payroll taxes, depending on the size, could add years of life to the fund.
  • Modifying Inflation Adjustments: Rather than raise benefits in line with the Consumer Price Index (CPI), policymakers might elect to tie future benefit increases to the “chained CPI,” which assumes that individuals move to cheaper alternatives in the face of rising costs. Using the “chained CPI” may make cost of living adjustments less expensive.
  • Taxing Benefits of Higher Earners: By taxing Social Security income for retirees in higher tax brackets, the tax revenue could be used to lengthen the life of the trust fund.

It’s clear, our new Trump administration will need to address Social Security reform and make some tough choices. However, history has shown us that our government does act on such matters when absolutely necessary. It’s now just a matter of not “if”, but when and how will the chances occur.

Claim a copy of our Social Security Guide

Check your Social Security Timing

Request a Complete Social Security Assessment