Social Security is the most important election you will vote on in your retirement years.

Our upcoming political elections are certainly important, but in terms of what’s going to affect you and your life, it is your Social Security election. When do you choose to pull benefits? How do you maximize income? How do you maximize Social Security income? It is such a substantial piece of the retirement plan.

If you’re born before 1955, then your full retirement age is 66. You can draw at 62, but if you wait from 62 all the way to age 70, guess how much your income is going to go up on your Social Security benefits? Seventy-six percent, from 62 to 70 guaranteed – well, only in the sense that Congress guarantees it. They could change the law. That is a risk factor, but what a dramatic increase.

Here’s the thing: We don’t know how long we’re going to live. What if you die when you’re 74? You probably shouldn’t have waited. We don’t know. We don’t know if Congress will change the rules. There are so many things to think about.

If you’re a 60-year-old married couple, you’re average life expectancy between the two of you is 90. So, we’ve got to worry about what things are going to cost when we’re 87. There’s an old expression, “Expect the best, but plan for the worst.” In this case, the worst would be you live beyond the money. Some people can’t afford to wait until they’re 70, because they need the income. Some great things can be done with spousal benefits, where you draw off your spouse without affecting your own benefit and you can see that 76 percent increase from 62 to 70.

But you have to know how to use the rules, and most people don’t really know. A lot of people and a lot of literature out there say delay your benefits. It’s not quite that cut and dry. Can you afford to? What is your life expectancy? What is your health? What are your spousal benefits? Maybe you play both ends of that spectrum. Maybe one spouse draws early, the other delays. It depends on your individual situation.

Every week, I’m going to talk about a different element of Social Security election, because it is so important. One of the most critical parts of a retirement plan is how you’re going to draw Social Security.


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