Hello, this is James Mayer, Branch Manager, from the Huffman Mayer Paolo Wealth Management group of Wells Fargo Advisors.



So you just turned 62 and you are eligible for Social Security, but you are still working, should you start your benefits now?



We have no idea if you should or not, because we don't know your situation. 


Here are three things you should consider.



Reductions, Taxation and Survivor benefits.



Reductions:



Taking Social Security when you still have earned income could have complications, and like most things related to Social Security there are a number of rules. If someone was to take their benefits between the age of 62 and the calendar year they turn their (FRA) FULL Retirement Age, their income would have to be less than $18,960 for Social Security not to reduce their benefit. The reduction would be $1 for every $2 over that amount that they had in earned income. The calendar year they turn their FRA that amount increases to $50,520 and would reduce their benefit $1 for every $3 they earns over that amount. The month they turn their FRA, they can earn as much as they would like without a reduction.



Taxes:



Social Security benefits can be tax free if you do not have significant income. While 15% of your Social Security payments will always be tax-free, there are complicated calculations based on your income that determines how much of the remaining amounts are considered taxable. Currently if you are married and filing a joint return the magic numbers are between $32,000-$42,000 of Provisional Income to determine the taxable amount. Provisional Income is your Modified Adjusted Gross Income + nontaxable interest + half of your Social Security benefits. Between $32,000-$42,000 of Provisional Income 50% of your Social Security benefits will be included in your taxable income. Over $42,000 you will have to include 85% of your Social Security benefits in your taxable income.



Spousal Benefits:



If you have a spouse that has a significantly higher benefit than the other delaying Social Security benefits could serve a protection for the lower earning spouse. Should the higher earner predecease the lower wage earner they could inherit that higher benefit.



There are numerous reasons to review when to take your Social security benefits. Our team makes this a priority when our clients want to build a retirement income plan.



We always want to talk with you. Please call the office schedule an appointment.



As always stay happy, safe, and healthy and hopefully we will see you very soon.



The views expressed by Huffman Mayer Paolo Wealth Management Group are his own and do not necessarily reflect the opinion of Well Fargo Advisors or its affiliates.