social security

As a recent or near-retiree, if you are considering working beyond your retirement date or taking an early retirement, there are some factors to consider that will affect your social security benefits.

Everyone dreams of retiring early and enjoying the golden years, but that luxury now starts at 67, not 65. And if you are a working retiree who chooses to collect early (before the FRA, or full retirement age is reached), you may be subject to a reduced benefit based on your retirement age. Assuming an average life expectancy, you can get lower monthly payments over a longer period of time or higher monthly payments over a shorter period of time.

And since you are probably wondering how much you will receive in benefits when you retire, The Social Security Administration site has a downloadable PDF that contains valuable information about your retirement benefits: www.ssa.gov/pubs/EN-05-10035.pdf

One other point to consider: If you are younger than full retirement age (FRA) your excess earnings are subject to a $1 deduction from benefits for each $2 you earn. In the year you reach FRA, you are subject to a different annual exempt amount, and your excess earnings are subject to a $1 deduction from benefits for each $3 you earn.

If you do decide that you want to retire early, talk to your financial advisor to determine the effects this will have on your retirement plan. If it is determined that it is financially feasible for you to go this route, your advisor can help you determine how much of your income will be withheld during the year.

If you have any questions about the complexities of working into retirement, visit Mooney Lyons at mooneylyons.com or call us at 1-847-382-2600.

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