The choices you make relating to your Social Security benefits have a huge bearing on your financial future.
Although you qualify to begin receiving your Social Security benefits at 62 years of age, a longer waiting period until you turn 70 will help earn a larger monthly benefit. You can check the retirement estimator, to get an estimate of your retirement benefits from your social security earning records.
Social Security retirement benefits for ex-spouses:
Even if divorced, you can be eligible for spousal benefits of up to 50% of your ex-spouse’s benefit at his / her full retirement age. To be eligible, you must have been married for at least 10 years, unmarried now, and be 62 years or older. To get the full benefit, you must be at least full retirement age when you begin benefits.
Social Security retirement benefits while working:
It is possible for you to work and collect Social Security benefits simultaneously. However, if you are under the full retirement age for the whole year, for every $2 earned over $17640, your benefit will be reduced by $1. In the year you reach full retirement age, your benefit will be reduced by $1 for every $3 you earn over $46,920 in the months prior to the month of birth.
On reaching full retirement age, there will be no reduction in benefit payments due to your earnings.
Taxes imposed under Social Security benefits:
If your combined income is between $25000 and $34000, and you are a single taxpayer, up to 50% of your benefits may be taxable. If it exceeds $34000, up to 85% of your benefits may be taxable. For those with Married Filing Jointly status, if the combined income is between $32000 and $44000, up to 50% of the benefits may be taxable, and up to 85% if it exceeds $44000.
If you are a resident of one of the 13 states that tax Social Security benefits, your benefits may also be subject to state tax.
Please consult your financial advisor for best advice on retirement planning.