
Social Security
Social Security Options and Their Requirements
Social Security offers more than just guaranteed income. You may be eligible to receive disability, spousal, survivor, and medical benefits.
Waiting until 70 will get you the highest Social Security benefit, but that doesn’t necessarily mean it’s the right time for you to apply. The right age to claim benefits depends on your projected longevity, your marital status, your financial needs – current and estimated, and your employment status. For some, it could make more sense to begin collecting payments at the Full Retirement Age, or even earlier. Consider the following factors when making your decision:
If you think you may have a long life in retirement, then you’ll need to maximize your income and ensure it lasts you for the rest of your life. The longer your life expectancy, the more sense it makes to delay claiming Social Security until age 70.
Single applicants benefit from delaying the receipt of their own benefits. But did you know that your spouse could also benefit from waiting to claim spousal benefits? Your husband or wife can take spousal benefits as early as age 62, but that may result in a benefit that’s as little as 1/3 of the amount they’re eligible to receive.
If your spouse instead defers until Full Retirement Age, then he or she can collect a stream of income that’s equal to 50% of your Social Security benefit.
Personal circumstances play a major role in the timing of Social Security benefits. There are times in which some retirees have to begin receiving their income as early as possible. An individual who is forced to retire earlier than anticipated due to layoffs or illness may decide to claim Social Security benefits earlier.
If you are under the Full Retirement Age (usually 66 or 67) and you make more than Social Security’s yearly earnings limit ($15,720), Social Security will deduct $1 from you benefit payments for every $2 your income exceeds the earnings limit. During the year in which you reach Full Retirement Age, Social Security will deduct $1 from your benefit payments for every $3 you earn over a different limit ($41,880 in 2016).
These penalties only apply to earnings before the month you reach Full Retirement Age. After that, you can receive Social Security benefits without deduction.
In the event you initially decide to take Social Security benefits early, and you later decide you should have waited to claim, you can withdraw your application within the first 12 months of starting to receive income. You will have to repay the amount that has already been paid to you. After that, you can start benefits at a later date and receive a boost to your income from Delayed Retirement Credits.
The old retirement adage says that we should use the three-legged stool approach to prepare for retirement:
According to the Social Security Administration, individuals aged 65 and over in the top quartile for income (an average of $78,180) received only 18% of their income from Social Security. So where does the remaining 82% come from?
Your Personal Pension is backed by insurance companies which guarantee that for every dollar you contribute, you will receive a certain amount of income every month starting when you retire. Unlike an income annuity, the Personal Pension allows you to contribute incrementally, in smaller amounts and at a younger age, similar to the way you’d put aside money in your savings account or 401(k).
Similar to the Personal Pension, income annuities provide a guaranteed lifetime stream of income during your retirement. However, instead of contributing over time, you pay a lump sum upfront to purchase your annuity from an insurance company. Then, the insurance company sends you a series of payments for the rest of your life.
A Personal Pension is a contract between you and top rated insurance companies. By making contributions to your Personal Pension over time, you develop a portfolio of guaranteed income available in retirement. Blueprint Income offers a Personal Pension account with the lowest minimum, $100. After opening an account, you can make subsequent contributions of $100 or more, each of which will increase your pension check.
Here you can see what contributing to a Personal Pension will guarantee you in annuity retirement income. After just a few years in retirement, you’ll have recouped your initial investment, and the rest will be profit.
At Blueprint Income, we offer annuities from more than 15 top rated insurance companies. Click below to get real-time personalized quotes.
From there, you’ll get access to our annuity guides and team of specialists to help you analyze your retirement finances and walk you through the application process.
Social Security offers more than just guaranteed income. You may be eligible to receive disability, spousal, survivor, and medical benefits.
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