This week’s wisdom is focused on Social Security. We are going to discuss three critical things about Social Security.
First, when should you actually take it?
Second, What are the rules regarding working while you are taking social security?
Third, Will it actually be there?
So as far as when you should take social security the answer is waiting till age 70 is USUALLY the best idea because as long as you live long enough you will get the most out of it. Of course if you really need income and have no other alternative you can start at age 62 however your benefit will be reduced by 20%, If you wait till age 70 your benefits go up by 8% a year
starting at age 66 so you would get 32% more income than your FRA (full retirement age).
We get a lot of questions about what happens if you are working and taking SS?
If you are age 62 and working your benefits are reduced by $1 for every $2 over $18,880 in income. So if you made $28,880 ($10,000 over the limit) your social security would be reduced by $5,000. Once you are 67 they give you a little more latitude and they are reduced by $1 for every $3 over the threshold. Once you are past 68 you can earn as much as you want without your SS being reduced however if you are single and make over $25K or married and make over $32K your social security will be taxable.
Ok so we hear a lot about the trouble our social security system is in so the fair question is will it even be there?
According to last 2020 SS Trustee report the trust fund could be depleted by 2034. However there would be enough coming in that you would still get at least 75%
In my opinion the future of social security is safe BUT it is going to have to be altered somehow to be sustainable. Taxes will have to increase or benefits reduced in some way shape or form.