Retirement Answer Man

This month on Retirement Answer Man we are maximizing social security benefits. All month long we are discussing the ins and outs of social security. The government doesn’t make anything simple, and social security is no different. So be sure to...

Show Notes

This month on Retirement Answer Man we are maximizing social security benefits. All month long we are discussing the ins and outs of social security. The government doesn’t make anything simple, and social security is no different. So be sure to catch the entire series, beginning with episode 228 to fully understand the complexities of social security and how to maximize your benefits. This episode is dedicated to learning how earning income during retirement can impact your social security benefit amount. Listen to this episode to help you learn how to maximize your social security benefit and rock retirement.

This feature of social security is underappreciated

Did you know that social security is adjusted for cost of living? This added benefit was added in 1975. Each year social security is increased by COLA or cost of living adjustment. Since 1975 the average COLA increase has been 3.9%. This sounds awesome, right? The past 20 years the inflation increase has only averaged 2.1%, and in the past 10 years, we have only seen an increase of 1.7%. Well, at least it’s something! Listen to this episode of the Maximizing Social Security series to learn more about your social security benefit.

What happens if you take social security prior to your full retirement age?

Not everyone wants to work until the full retirement age of 66. The goal for many of us is to retire early. If you decide to retire early and take social security benefits starting at 62 or any time before age 66 you will receive less than the full retirement amount. Another penalty that you will incur is that if you earn over $17,040 your benefit will be reduced by one dollar for every 2 that you make over that amount. The government will eventually make it up to you over time, but of course, it will be rather complicated and paid out over 15 years. Listen to this episode to help you understand the social security complexities of taking early retirement.

If you work until full retirement age you could get the best of both worlds

Ideally, social security is not to be drawn until the full retirement age of 66. You will receive a higher benefit and you can earn as much as you want without a benefit reduction. This is why I am a huge proponent of pretirement. Taking on some sort of pretirement work like consulting, part-time work, or starting your own business offers an alternative to taking your retirement early and reducing your benefits. Are you ready to rock retirement? If so, listen to this episode to begin maximizing social security benefits.

What happens to your social security after full retirement age?

Although you receive your full benefit amount at age 66 this doesn’t mean that it’s all yours free and clear. Part of your benefit is taxable if you earn over certain amounts. For example, if you earn between $25-34,000 you will be taxed on half of your social security benefit. If you earn more than $34,000 then you will be taxed on 85% of your social security check. Each situation is different, so that is why it is so important to use more than simply numbers to decide when you want to start rocking your retirement. Start your social security education today by listening to this episode of Retirement Answer Man.

OUTLINE OF THIS EPISODE OF THE RETIREMENT ANSWER MAN HOT TOPIC SEGMENT
  • [2:17] This is a feature of social security that most don’t think about
  • [6:46] How is cola calculated?
PRACTICAL PLANNING SEGMENT
  • [10:05] What happens if you take social security prior to your full retirement age?
  • [14:55] If you work until full retirement you could get the best of both worlds
  • [15:30] What happens to social security benefits after full retirement age?
THE HAPPY LAB SEGMENT
  • [19:40] Go get a little kookie
TODAY’S SMART SPRINT SEGMENT
  • [21:14] Evaluate what type of income you may earn from age 62 on
Resources Mentioned In This Episode

Social Security Administration website

Roger’s YouTube Channel - Roger That

BOOK - Rock Retirement  by Roger Whitney

Ask Roger a question

Work with Roger

3-video Series: 5 Minute Retirement Makeover

Roger’s Retirement Learning Center

The Retirement Answer Man Facebook Page

What is Retirement Answer Man?

A top retirement podcast. Roger Whitney, CFP®, CIMA®, CPWA®, RMA, guides you on how to actually do retirement well financially and personally. This retirement podcast isn't afraid to talk about the softer side of retirement. It will teach you how to retire with confidence. Two-time PLUTUS winner for best retirement podcast / blog and the 2019 winner for best financial planner blog. This retirement podcast covers how to create a paycheck, medicare, healthcare, Social Security, tax management in retirement as well as retirement travel and other non-financial issues you'll need to address to rock retirement. Retirement isn’t an age OR a financial number. It’s finding that balance between living well today and feeling confident about your retirement. It’s about gaining more freedom to pursue the life you want. Join the rock retirement community at www.rogerwhitney.com