Mike It discussed on Investing Sense

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As I understand if I do I'm in that age group where I can take some security at sixty six right and I understand if I if I'm still working my soul security benefit will be reduced right is there a way to calculate how much it's going to be reduced there are my cell is that a percentage of my yearly grocer Mike it's run it's roughly well I should pack up your right it's confusing and in fact you said a couple of things anecdotally that we're not quite accurate so let's just set the record straight social security as important as it is as wonderful as it is is extraordinarily and in my view unnecessarily complicated you pay into the system for your entire working career you reach you give an age of start to receive benefits a lot to be that simple and easy but Hey it's a government program and therefore nothing simple and easy here's what it comes down to you're allowed to begin receiving retirement benefits starting at age sixty two you don't have to wait until you're sixty five or sixty six you can start at sixty two yeah what you understand that but you'll receive less as you know and so the longer you delay the start of benefits the higher the benefit will be once you do start there's an important phrase in social security circles called F. R. A. full retirement age at your full retirement age which is roughly age sixty six for most working Americans that sixty six in a few months and so on depending on your actual birthday starting at run eight sixty six your full retirement age you get your full one hundred percent of your social security benefits if you start to benefits prior to that you get less than the full benefit if you delay you get more than the full benefit if you wait until you're seventy you'll actually get a hundred and thirty percent of your benefits so instead of getting a dollar you get a Buck thirty if you wait eight seventy so the real question is when should I start should I take it starting at sixty two even though it's less but sooner or do I wait till I'm seventy which is more but it's later part of the implication our taxes under the rules if you're still working prior to your full retirement age you will lose a lot of the income to taxes after your full retirement age that doesn't apply so it certainly makes sense for you if you don't really need the money and it sounds like you don't because you're still working that you should in fact delay which is what you've been doing so far and I would recommend you continue delaying until you do in fact quit working okay so completely stopped working and then take it then or eight seven ever comes first because after a seven day your benefit won't keep growing by delaying so you might as well take it starting at eight seventy right yeah and I printed out Michael security statement and I see what it is that sixty six and it's a percent every year up right age seventy right but I also know that if I wasn't working if I stop working at sixty six but still the lady at say one year till sixty seven to get that extra eight percent right it takes twelve I have under the mat it takes twelve and half years to break even on missing that first year of payments yes so the real question for you is how long you're going to live do you think you're going to live beyond age seventy five well that's the real crystal hold everybody wishes they had how's your health a good and what your family history how long my parents nineties mom my mom died at seventy unfortunately but my dad's ninety one is still going may I ask what was your mother's cause of death it well it was complications due to Parkinson's sepsis is but that's because it she just became invalid got it the reason I ask is that many of the illnesses that have caused people to die in the past have already been cured and many others will be cured by the time you reach those advanced ages you know heart disease respiratory illness cancers themselves and so on so if your dad's already is still alive in his nineties and you're in good health today I think you can anticipate with a reasonable degree of confidence that you're going to live well beyond seventy five or eighty years of age meaning it's worth the one year wait to get the higher benefit because in your eighties and nineties you'll be the beneficiary of a higher income thanks to the one year wait okay so just to recap then if I took it before sixty six there's heavy taxes on it but from sixty six on there are no taxes that's correct prior to sixty six about half of your benefit will be subject to taxes after your full retirement age that goes away even if I'm still working correct okay so all right well you you know I've everything I've read on this and I'd never heard or never read something that said that so once again this is just so thoroughly confusing well it isn't even all in even gets more confusing than that because of the fact that you're married did your wife work she did up until she retired many many years ago and she collecting social security benefits she is not she just turned sixty five in August so we're gonna takers next year so the question will Hearst be reduced five I'm working and she's not now but here here's the real question might it be possible that she would get a higher benefit as your spouse then based on her own work record I looked at that and where she could take a fifty percent of mine now and noted that the answer is no hers would be more than fifty percent and that's really the case that many people don't realize that spousal benefits are often higher than the worker benefits so there's an implication for spouses there's also an application depending on the age disparity between the husband and the wife doesn't sound like your racist verities all that significant yeah yeah I I look into that and you know if we were ten years apart she was ten years younger than me then it would be best that she went ahead and took it Neil up to fifty percent of mine exact no she's actually too much older than me and then there are other issues if there's a divorce which doesn't seem to apply to you other other issues if there's a way to which doesn't apply to you there are other issues if there are children under the age of sixteen are there no one dollar thirty years old so this just demonstrates the incredible complexity and why the answer when should I take social security depends on all of these factors are you still working how long do you think you're going to live are you married what's the age difference between you and your spouse how much income are you earning how much income is your spouse earning or their children under sixteen is there anybody with a disability either you or your spouse the list goes on on on the factors that affect the equation of helping us answer the question when should you start to receive social security benefits and it is not a one size fits all and that's why there's really no substitute for meeting with a financial adviser who can go through all of this in great detail for you to help make sure you're getting it right because as you know jam once you make the decision it's pretty much your reversible that's right yeah I got to get it right I live in with a forever yep yeah so I leased a week of sixty six and quite frankly the reason I'm still working is because of that reason generous for one K. plan of my work so I wanted to keep soccer as much as I can until I finally say okay that's enough and are you enjoying working yeah it's okay if you could give it up as well I could be okay therefore what we need to do is some financial planning calculations to determine do you have enough money saved between your four oh one K. and other savings and investments plus the income you'll get from social security is all of that enough to support you and your wife for as long as you and your wife are expected to live because of the answer to that is yes then there's no reason to keep working an extra year or two merely to increase the balance of the four oh one K. to produce income that is already sufficient to meet your lifestyle needs and you might as well just quit now enjoy yourselves now that is that is true so I would argue that you should meet with a financial adviser who can do some retirement planning calculations for you to test the theory how long do in fact you need to continue working you said you're going to do it for another year to win a concluding retire right now we may conclude you need to keep working on one or two more years with three or four more years okay in other words let's do the math okay that's great advice yeah I do I know this answer with the caller but there's a certain number that you you can figure out what how much you have any investments and what you can draw on it comfortably do not depleted and then you know be able to maintain your life so there's no particular name for it but the bottom line is we want to know that there's enough money in your piggy bank coupled with social security to provide you with retirement income for as long as the two of you are expected to live and we've got an office not far from Ventura California so we're happy to to help you and go through these calculations for you that's what we do is financial planners helping people realize based on where you're at based on how much money you've got how much money you're at continuing to save where that money is invested how long you're expected to live how much money you need on a monthly basis here's weighing you can retire it's either right now okay or it's never or somewhere in between not ready but great advice I really appreciate in chance to talk because this is just so confuse it is confusing all the more so for folks who have never dealt with before and yet we do it every single day and so we're pretty good at it you've dealt with it once and you're not as good as we are although you seem to have a pretty good handle on the stuff so you have that put you ahead of the curve so give us a call if we can help same phone number you dial here today triple late planned wreck and we're happy to help you Jim okay sounds great thank you so much you're very welcome you can do the same thing Jim did call us at triple eight seven five to sixty seven forty two let's confirm your assumptions let's make sure you are in fact on track to achieve your goals and will give you the advice you need so you can have the peace of mind you're looking for triple H. plane wreck online it with government dot com.

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