Social Security alone won’t provide a comfortable retirement, but it remains a big part of your financial future. Here’s a look at what’s in store from the perspective of a financial advisor.

 

You can start drawing Social Security payments at age 62, but your benefits are permanently reduced each month before your full retirement age.

 

If you’re in good health and have a family history of longevity, you might be better off waiting. You’ll have more years to draw a larger payment after your full retirement age.

 

If you’re still earning income and desire to draw Social Security benefits early, you may be penalized. For every three dollars you earn above an income threshold, your Social Security benefits will be reduced by one dollar if you do not reach your full retirement age during that same year. When you reach full retirement age, it ends.

 

Something else to consider is: your spouse’s benefits. If they are tied to yours, that may manipulate your final decision.

 

You could delay Social Security payments up until age 70/ a move that will permanently increase your payment. The increase varies, depending on your year of birth.

 

Your benefits are based on the 35 years that you earned the most money (wages are indexed to account for wage inflation).

 

Since the top-earning years for most people occur late in their careers, retiring early can cut your benefits. If you retire before achieving 35 years of earnings, every year short of 35 will be listed as zero earnings.

 

Check the Social Security statement you receive each once a year that estimates your monthly benefits. It should be mailed 3 months before your birthday. You can also use online calculators at ssa.gov to get an estimate of benefits.

 

1 in 3 people who receive Social Security pay income tax on their benefits.

 

 

Social Security benefits have adjusted for inflation since 1975. The 2006 Cost of living increase was 4.1%.

 

For information, call the Social Security offices at 1-800-772-1213