Retirement Planning: Social Security 101 (2021)

Social security is a pillar of financial and economic security relied upon by millions of Americans. It provides benefits to retirees, disabled persons, and the families of retired, disabled, and deceased workers.

So what is social security and how does it work?

Social security is a pay-as-you-go program. This means that today's workers pay social security taxes into the program and money flows back out as a monthly income to today's social security recipients.

When it comes to retirement benefits, social security is traditionally considered one of the three legs of the retirement stool, pensions, retirement savings, and social security.

Of course, today, many of us approaching retirement may not have a pension, so our three-legged stool isn't nearly as sturdy as it was in prior generations, making our decisions regarding our retirement savings and social security even more important.

When it comes to social security retirement benefits, each of us has what is called a full retirement age. This is the age when we can receive our full social security retirement benefit.

Your full retirement age is determined by the year that you were born.

If you are born between 1943 and 1954, your full retirement age is 66. If you were born after 1954, your full retirement age could be as late as 67.

But you don't need to wait until full retirement age to start collecting social security retirement benefits.

You can begin taking benefits as early as age 62, or you can delay taking benefits to age 70.

Deciding when to take benefits can be one of the most important decisions you make when it comes to your retirement income.

Why?

Because the age at which you choose to file for benefits will determine just how much you will receive from social security.

You and your spouse's health, whether you will continue to work prior to full retirement age, potential taxation of your benefits, and whether you have other financial resources from which to draw from during retirement, are all additional factors you should consider when making social security decisions.

The Annuity Expert can help discuss how a fixed index annuity can complement your approach to social security retirement benefits to build a more comprehensive retirement income strategy.

Learn More: https://www.annuityexpertadvice.com/social-security/