Wondering where your income will come from in retirement? You may have a pension, a 401(k) or even an IRA or other personal savings. No matter your situation, however, Social Security is almost certainly going to be a part of your retirement income mix. Nearly 90 percent of all retirees rely on Social Security benefits for a portion of their income.1
Your Social Security benefit amount is based on a few factors. One of the biggest is when you file. You can file for benefits as early as age 62 or as late as age 70. Generally, the longer you wait, the higher your benefit amount will be.
Another big factor is your career earnings. Your Social Security benefit is based on the average of your 35 highest-earning years. Of course, that could be problematic if you have limited work history. For example, perhaps your spouse has a much higher earning history than you do.
Are you approaching Social Security age? If so, you may be facing a difficult decision about when and how to file for benefits. It could be an important decision. If you’re like many retirees, Social Security will play a large role in your retirement funding strategy.
Your decision on when and how to file will likely be permanent. In most cases, your Social Security benefits cannot be altered or adjusted after you file and begin receiving benefits. While your payment may increase in the future because of cost-of-living adjustments, you likely will not have the opportunity to change your filing status.