May 16, 2019  |  Written By Kirk Futrell

Ever hear the phrase, “It’s like drinking out of a fire hose”? This is very true when applied to deciding when to file for Social Security and what claiming strategy to employ. This decision can make a very substantial difference in the overall success of your retirement plan. It’s overwhelming, I know. Let’s wade into the pool. I’d like to go over the basics which apply to everyone regardless of age, financial situation, or filing strategy.

Your full retirement age (FRA) as defined by the Social Security Administration is NOT tied to when you stop working. It is a calculation based only on the year in which you were born. For example, if you were born between 1943-1954, your FRA is 66. Please don’t confuse this with your actual age of retirement. A basic benefit can be taken ANY month between age 62 and age 70 regardless of when you stop working.

Generally, the longer you wait to take a benefit, the bigger your check will be. One caveat is that if you file before your “Full Retirement Age” you might not receive your full benefit amount if you are still earning an income. Social Security benefits were designed to supplement income during retirement.

Benefits are calculated based on your highest 35 years of income. This calculation produces the amount you will receive should you file at your FRA. This amount is called your Primary Insurance Amount (PIA). The amount you receive is reduced for each month you file prior to FRA and grows at 8% after FRA until you turn 70.

I’ll stop here. Let’s go slow. There is a lot more. The Social Security website is a good place to learn more but it can get confusing. Don’t hesitate to give Lakeside a call if you get stuck. Start with figuring out your FRA and your PIA then step forward from there. Good Luck!

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