Understanding Social Security’s Role
First, it’s important to recognize what Social Security is designed to do. It’s a guaranteed source of income that can help supplement your retirement savings. But it was never intended to be your entire retirement income. For most, Social Security will replace about 30-40% of pre-retirement earnings. The rest comes from your own savings, pensions, and other investments.
Timing Is Everything
One of the biggest decisions you’ll make regarding Social Security is when to start taking benefits. You can begin as early as age 62, but your monthly benefit will be reduced. Wait until your full retirement age (typically between 66 and 67), and you’ll receive your full benefit. Delay beyond that, up to age 70, and your benefit grows by about 8% each year.
Deciding when to claim benefits should take into account your health, life expectancy, financial needs, and even your spouse’s situation. It’s not a one-size-fits-all answer. That’s why personalized guidance is key.
Social Security and Spousal Benefits
If you’re married, divorced, or widowed, you might have access to spousal or survivor benefits. Many people don’t realize they could be eligible for a larger benefit by claiming on a spouse’s record, even after divorce. Understanding how spousal benefits work can help maximize what your household receives.
Taxation and Social Security
Yes — your Social Security benefits can be taxed. Depending on your total income, up to 85% of your Social Security income could be subject to federal taxes. And some states tax Social Security as well. Knowing this in advance allows you to plan for tax-efficient withdrawals from your retirement accounts.
Social Security in the Context of Your Retirement Puzzle
Think of Social Security as a steady foundation. It’s there to provide income for life, but it’s not meant to stand alone. Other pieces of your retirement puzzle include:
- 401(k) or IRA savings
- Employer pensions (if available)
- Investment accounts
- Real estate income
- Long-term care planning
- Health care and Medicare considerations
Each piece plays a role, and how you coordinate them can make a significant difference in how long your money lasts — and how confident you feel in retirement.
Why Personalized Planning Matters
Everyone’s situation is different. Maybe you’re still supporting your adult children or helping with grandkids. Maybe you’re caring for parents or navigating rising healthcare costs. All of these factors impact how you should approach Social Security and retirement.
The good news? You don’t have to figure it out alone.
Fit Social Security Into Your Bigger Picture
Social Security isn’t a plan on its own — it’s a piece of the puzzle. Let’s fit it into your retirement strategy.
Working with a financial advisor can help you:
- Decide when to claim benefits
- Minimize taxes on your benefits
- Coordinate spousal and survivor benefits
- Integrate Social Security with other retirement income sources
You deserve a retirement strategy that works for your unique life circumstances. If you’re feeling overwhelmed by all the moving parts, now is the time to reach out.
Let’s fit the pieces together — so you can move into retirement with clarity and confidence.
The concepts illustrated here have legal, accounting and tax implications. Neither Janney Montgomery Scott LLC nor its Financial Advisors give tax, legal, or accounting advice. Please consult with the appropriate professional for advice concerning your individual circumstances.
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