When to receive social security benefits is one of the most important financial decisions people will make.
The month of April is designated as National Social Security Awareness Month. Barry Bigelow of Great Waters, a local financial professional, discusses the importance of social security and what to consider in order to maximize the benefits.
When it comes to how important it is to file for social security benefits, Bigelow says it is often one of the most important sources of income in retirement, and there are hundreds of ways to do so.
“Patience is essential. Social security benefits will begin about a month after you file for them; my advice is to wait until you truly need or want to file for them in order to receive the maximum benefit.”
Other suggestions include:
• Create your social security account and review your earnings record online as soon as you reach retirement age.
• You can file for social security at the age of 62, but you will not receive your full benefit until you reach full retirement age, which is 66 or 67 depending on the year you were born.
• Social security benefits are tax-free, which means you won’t have to pay taxes on your entire income. Depending on your income, you could be taxed on anywhere from 0% to up to 85% of your benefits.
Taking a look at the big picture
• Social security typically accounts for approximately 40% of an average retiree’s annual income. You can’t make a filing decision in a vacuum; instead, you should conduct a thorough examination of your entire financial picture.