Four Things You Need To Know About Social Security When to Start? One of the most common questions about Social Security is when to start receiving benefits. The earliest age to begin is 62, although there are significant trade-offs when doing so. First, your benefits will be permanently reduced by 25.8% from those payable at Full Retirement Age (FRA) over the course of your lifetime. Second, your benefits will be reduced if you earn more than $18,960 a year. The reduction will be $1 for every $2 you earn over that limit. The limit rises every year, but by a modest amount. For those considering part-time work during retirement, this may not be a problem, but for folks planning to continue full-time employment, this reduction could wipe out the benefits they would receive. For those who wait until FRA, there is no limit on earned income and no penalty. Full retirement age is now 66 years and two months. It increases by two months every year. To get the highes
What’s a Safe Withdrawal Rate in Retirement? If you are already retired or planning to retire soon, one of your biggest concerns will be having sufficient income from your investments (and Social Security) to cover your ongoing expenses without running out of money. Another concern will be how you will spend your time, preferably in a satisfying manner. The financial part of the equation can be tricky since there are several variables that can change the outcome dramatically. Those with children often are concerned about leaving a substantial inheritance. Those without heirs can draw down the earnings on their assets and take distributions from the principal amount. The former situation has a heightened emphasis on the prospective returns on assets invested and the ongoing flow of expenses. The usually suggested withdrawal rate is 4% of assets in Year One, adjusted each year thereafter for inflation. When inflation rises, the withdrawal increases . . . and vice-versa. V