Social Security recipients will receive a 1.7% cost-of-livng increase to their benefits in 2013, but many are wondering if that will be enough if prices for essentials like food and gas continue to rise. Meanwhile, individuals approaching retirement age are faced with other questions about social security, such as how large a part it should play in a retirement strategy and when is the optimal time to start taking benefits.
“In general, the longer you expect to live after retirement, the better off you are deferring the start of your payments”
1. How are benefits increases decided?
Cost-of-living adjustments are determined using aformula that considers various data, including theConsumer Price Index, the government’s key inflationmeasurement. Some things worth noting:
2. When you file for benefits can make a difference.
Eligibility for most people begins at age 62, butmany continue to work well beyond that age. Untilyou reach Full Retirement Age – between ages 65 and 67, based on your year of birth – wages or self-employment income can greatly reduce or even eliminate your benefits. Therefore:
3. Non-wage income can help bridge the gap.
If you have other elements in place to fund retirement, there are planning strategies that could help you maximize your Social Security benefits within your lifetime.
What You Should Do Now:
Social Security should be just part of a broader retirement income plan that you make with your Financial Advisor. Armed with the knowledge of your current financial and personal situation, he or she can help you understand exactly how much you’ll need to maintain the life you want in retirement, and how Social Security can work with your other investments to get you there.
Article provided by Robert W. Baird & Co. with the authorization of its author for Evan Guido, Vice President, Financial Advisor at the Sarasota office of Robert W. Baird & Co., member SIPC. The opinions expressed are subject to change, are not a complete analysis of every material fact and the information is not guaranteed to be accurate.
Evan R. Guido
Vice President of Private Wealth Management
One Sarasota Tower, Suite 806
Two North Tamiami Trail
Sarasota, FL 34236-4702
941-906-2829 Direct Line
888 366-6603 Toll Free
941 366-6193 Fax
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