As you get older, you’ll want to make sure that you have a sufficient income so that you can take care of yourself once you’re retired. The timing of your Social Security application can have an enormous impact on your future income. Make sure you know all the facts about when to start taking money out for your best future. Here are three steps you should take before filing for Social Security benefits.
Identify All the Benefits You Qualify For
There is a complex interplay between Social Security retirement benefits and Social Security disability benefits. For example, if you’re aged 60 and currently receiving SSI disability benefits to cover a condition that makes you unable to work enough to support yourself, you can still earn a small amount of money. Once you switch over to Social Security retirement benefits, you will be penalized for any monies earned and lose a portion of your Social Security retirement benefits. The process of applying for SSI insurance payments, or disability through Social Security, is challenging and may require the assistance of an attorney. Be patient and be prepared for a fight.
Protect Your Social Security Retirement Benefits for as Long as Possible
You can start to collect your Social Security Retirement at the age of 62. However, the government will review your benefits and reduce your payouts to cover for the additional 48 months. At times, this reduction can be quite significant, and that’s forever. Your benefits will not go up when you turn 66.
If you’re ready to leave full-time work but haven’t reached the full payout age of 66, consider getting a part-time job to cover some expenses while you slip into full retirement. Before you collect Social Security retirement benefits, your earning potential is theoretically unlimited. Once you retire and start collecting, your part-time pay can only be around $15,000 before you are penalized for your earnings.
Use Social Security Disability Benefits to Their Fullest Extent
It should be noted that if you have retirement savings, you can direct those funds with the help of a financial planner so that in the event of your death, your family and loved ones can benefit. If you use up your retirement savings and then take Social Security, those benefits will stop or be severely reduced for your spouse once you’re gone.
For those who need to stop working and retire early, make sure that you explore SSDI or disability income. SSDI income is generally larger and more user-friendly than retirement income because those on SSDI have access to Medicare and prescription drug coverage but also get cost of living increases. Taking Social Security retirement income at 62 may be easier than working through the process of qualifying for disability benefits, but it will ultimately result in a lower monthly income for the rest of your life.
Before you file for Social Security benefits, it’s important to make sure you have a plan so you can receive all the benefits possible. You don’t have to wait until 67 to take your Social Security benefits, but it can help if you can afford it. Access to your benefits at age 62 should really only be selected as a last resort due to the income reduction over your lifetime.
