Every year, right around your birthday, the Social Security Administration (SSA) sent you a small gift in the mail. A quick summary helped explain just how money would be coming your way each month—once you started to get back what you’ve paid into the system.
And then, the mailings just stopped. The SSA decided to save on printing and postage, which cost $65 million each year to mail out. Now, unless you are age 60 or older, and have not yet signed up to the SSA website, then you likely have no way of knowing your benefits. If that’s your case, then now is a good time to sign up.
It’s fairly easy. And it can give you a solid peace of mind, knowing that your retirement finances will get a solid booster shot. While on the topic, let’s review some of the past discussion we’ve had on Social Security.
First, remember that your actual Social Security benefit may be smaller than you expect, as the benefits may be taxed. That’s why lots of people pursue Roth IRA conversions. Migrating funds from your IRA into a Roth IRA before you turn 70 may lead to such a small balance in your IRA that your annual income comes in below tax thresholds set by Social Security.
Also, remember it’s best to hold off on Social Security until as long as possible (age 70). The benefit rises 8% per year for each year that you wait (along with a modest upward adjustment for inflation). And a larger Social Security check may prove to be quite helpful when you’re trying to make ends meet later in life.
Of course, if you have a history of health problems, or simply need the money to live off before you turn 70, then don’t wait. Broadly speaking, if you live past 81, then you’ll be glad you held off collecting until age 70.
Lastly, many people want to retire in their late 50’s or early 60’s and wonder how that will impact their projected Social Security benefit. The estimated benefit may be an accurate assessment—as long as you have 35 years of work history under your belt. The good news: as long as you keep working, your projected benefit will likely keep rising higher, every year you log on to check the latest figures.