Three Key Questions to Answer Before Taking Social Security

Man researching social security benefitsSocial Security may be a critical component of your financial strategy in retirement, so before you begin taking it, you should consider three important questions. The answers may affect whether you make the most of this retirement income source.

When to Start?

The Social Security Administration gives people a choice on when they decide to start to receive their Social Security benefit. You can:

  1. Start benefits at age 62.
  2. Claim them at your full retirement age.
  3. Delay payments until age 70.

If you claim early, you can expect to receive a monthly benefit that will be lower than what you would have earned at full retirement. If you wait until age 70, you can expect to receive an even higher monthly benefit than you would have received if you had begun taking payments at your full retirement age.

When researching what timing is best for you, it’s important to remember that many of the calculations the Social Security Administration uses are based on average life expectancy. If you live to the average life expectancy, you’ll eventually receive your full lifetime benefits. In actual practice, it’s not quite that straightforward. If you happen to live beyond the average life expectancy, and you delay taking benefits, you could end up receiving more money. The decision of when to begin taking benefits may hinge on whether you need the income now or if you can wait, and additionally, whether you think your lifespan will be shorter or longer than the average American.[1][2]

Should I Continue to Work?

Besides providing you with income and personal satisfaction, spending a few more years in the workforce may help you to increase your retirement benefits. How? Social Security calculates your benefits using a formula based on your 35 highest-earning years. As your highest-earning years may come later in life, spending a few more years at the apex of your career might be a plus in the calculation. If you begin taking benefits prior to your full retirement age and continue to work, however, your benefits will be reduced by $1 for every $2 in earnings above the prevailing annual limit ($17,640 in 2019). If you work during the year in which you attain full retirement age, your benefits will be reduced by $1 for every $3 in earnings over a different annual limit ($46,920 in 2019) until the month you reach full retirement age. After you attain your full retirement age, earned income no longer reduces benefit payments.[2][3]

How Can I Maximize My Benefit?

The easiest way to maximize your monthly Social Security is to simply wait until you turn age 70 before claiming your benefits.[1][2]

“Courage is resistance to fear, mastery of fear – not absence of fear.”

– Mark Twain


Recipe of the Week

The Best Cream of Mushroom Soup

Mushroom Soup

Serves 8

Ingredients:

  • 4 Tbsp. butter

  • 1½ pound mushrooms, sliced

  • Salt and pepper, to taste

  • 1 medium onion, diced

  • 2 stalks celery, thinly sliced

  • 4 cloves garlic, minced

  • 2 sprigs fresh thyme leaves

  • 3 Tbsp. flour

  • ¾ cup dry white wine or sherry

  • 4 cups vegetable or chicken stock

  • ½ cup heavy cream

  • 2 tsp. balsamic vinegar

Directions:

  1. Melt 2 Tbsp. butter in an enameled, cast-iron Dutch oven on medium-high heat. Add ⅓ of the mushrooms and sauté until dark golden brown. Stir occasionally and cook about 5 minutes. Salt and pepper the mushrooms, then remove them from the pot and set aside.

  2. Melt the remaining butter in the same pot, then add the remaining mushrooms, onion, celery, and thyme. Stir frequently until the vegetables are soft, about 5 to 6 minutes.

  3. Add the flour by sprinkling over the contents of the pot. Add salt and pepper and stir constantly for 3 minutes, until the flour cooks. Slowly adding the wine or sherry, continue stirring until you reach a slow boil, then slowly pour in the stock. Keep stirring to avoid lumps from the flour.

  4. Bring the soup to a simmer for 20 minutes, stirring occasionally, so it doesn’t stick. Let the soup cool for 20 minutes. Transfer to a blender or use an immersion blender to puree until mushrooms are mostly broken up into small bits. Pour the soup back into the pot, add the cream, and heat it to a simmer. Add balsamic and serve.

  5. Top the soup with the reserved mushrooms and serve with warm sourdough bread.

Recipe adapted from The Pioneer Woman[4]


Tax Tips

Tax Credit for the Elderly or Disabled

You may be able to take the credit if you are 65 years of age or older or if you retired on total and permanent disability and have taxable disability income. There are certain limits that your income cannot exceed.

Claiming the Senior Tax Credit if You’re 65 Years or Older

Based on your filing status, there are certain qualifications. If you are married, you and your spouse must file a joint return to claim the credit.

Claims for Those Under 65 and Permanently Disabled

You’ll need to procure a physician’s certification stating that you cannot engage in gainful activity due to your mental or physical condition, and in addition, that the condition has existed or is expected to exist continuously for a minimum of 12 months or if it is expected to result in your death.

You May Not Qualify Due to Taxable Income

You may meet the above qualifications detailed above and may still be ineligible for the credit if your taxable income exceeds certain limitations. To find out more visit https://www.irs.gov/pub/irs-pdf/p524.pdf.

* This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov[5]


Golf Tip

Fades and Draws Made Easy

This decades-old trick is a simple way to shape shots, and it is every bit as valid today.

To hit a fade – Jack Nicklaus’ preferred shot – make sure to aim the face of your club where you want the ball to land. Next, align your body to the left (or right, for left-handers). To hit a draw, just do the opposite: aim the clubface where you want the ball to land. Align your body to the right (or left, for left-handers). For both fades and draws, swing the club where your body is aimed.

Tip courtesy of Golf Digest[6]


Healthy Lifestyle

The Benefits of Journaling Your Meals

One of the first things you should do if you want to change your diet is to start a food journal – before you make any dietary changes. That way, you or a registered dietitian nutritionist can examine your food choices, times you eat during the day, and gauge your overall eating habits. All of these variables make a difference. You’ll write down the date, what you ate, and the time you ate. Here are more benefits to keeping a food journal:

  • Weight loss: According to a 2008 study by Kaiser Center for Health Research, those who kept a food journal lost twice as much weight as those who didn’t. Jotting down your food intake can make you more accountable for your food choices.
  • Planned fasting periods: The lapses in time between meals can help you with metabolism and weight loss. Depending on the time frame, there could be advantages for your blood sugar, cellular activity, and metabolism.
  • Noting in your journal how you feel can help too. You can help to rule out food intolerances by noting if you’re bloated, gassy, or have other digestive discomfort. You may also be able to identify if you’re eating for emotional reasons, which may help you to change your behavior.

Tip adapted from SFGate[7]


Green Living

What if You Can’t Recycle It?

You may have all good intentions to recycle, but there are so many rules, regulations, and multi-material consumer items, it can be hard to keep up. Here are a few tips about what to do when some of those items come into question:

  • Glass kitchenware: If these items are in good condition, you can donate them. Otherwise, if they are broken, they should go in the trash.
  • Mirrors: Forget about seven years bad luck with that broken mirror. Put it in the trash and be done with it! (This glass cannot be recycled since it is treated.)
  • Packing materials: Try taking these to a local shipping store or a small business that can use them.
  • Plastic bags: These grocery bags can be returned to some grocery stores for special handling and recycling.
  • Shredded paper: Once paper has gone through the shredder, it is too small to be recycled. You can check to see if your municipality has a local drop-off location.

Tip adapted from Real Simple[8]


[1] www.nerdwallet.com/blog/investing/take-social-security-benefits/
[2] www.thestreet.com/retirement/social-security/maximum-social-security-benefit-14786537
[3] www.fool.com/retirement/2018/12/01/4-things-you-need-to-know-about-filing-for-social.aspx
[4] thepioneerwoman.com/cooking/creamy-mushroom-soup/
[5] www.irs.gov/pub/irs-pdf/p524.pdf
[6] www.golfdigest.com/story/how-to-make-the-ball-curve
[7] healthyeating.sfgate.com/benefits-food-diary-7685.html
[8] www.realsimple.com/home-organizing/green-living/how-to-recycle-everything