11 of 12. Social Security Numbers

When it comes to social security, it's good to know what to expect.   It's an important part of planning for your retirement years, NOW while you're young and have a minimum 10 years of working life ahead.

Be smart. Educate yourself on what you can expect in the way of income for your later years.

No one told me, and when I discovered it, I was shocked. I'm speaking up as loud as I can because it is frightening to be without a way to pay for the basics of life.

According to AARP (as of 2011) 23 percent of people 65 and older live in households that depend on Social Security for 90% or more of their income.

Social security does provide some financial relief for those who are eligible, but that's the dig. Baby boomers started turning 65 in 2011. Many Boomers already won't be able to collect social security income until age 66 or 67 or later. If born in 1960 or later, the retirement age for social security is 67. It's predicted that within 10 years the eligibility age will be 80. 

Without a good paying job, income and benefits, how will you pay for food, phone, the mortgage, car insurance, health insurance... until social security kicks in? It could be a 10-, 15- or 30-year gap.

First, you must pay in before you can take out. In other words, to qualify for any social security benefits, you must pay social security tax for 40 calendar quarters or 10 years. You can do this through traditional employment or pay the tax yourself through self employment.

It's good to know that you can take a reduced payment by putting in your claim early. So, when planning your future, you want to decide when you want to put in your claim.

According to US News, many people want to retire early, but may not be able to financially. Retiring early reduces your Social Security benefit, which means you have to save even more on your own before you retire.

Here’s how early retirement impacts your Social Security payments.
If you are eligible for $1400 at full retirement age, and if your full retire age is 67, but you want to claim early, your monthly benefit amount is permanently reduced:

at age 62 your payment is reduced about 30 percent = $980
at age 63 your payment is reduced about 25 percent = $1050
at age 64 your payment is reduced  about 20 percent = $1200
at age 65 your payment is reduced  about 13.3 percent = $1213.80
at age 66 your payment is reduced  about 6.7 percent = $1306.20
at age 67 you earn a full payout = $1400

These numbers are a general example. The actual amount is determined by a complicated formula and that may change.  But... if you wait to collect Social Security until you reach full retirement age, there is no earnings limit that reduces your benefit. 

If possible, it is a good idea to delay your claim for Social Security benefits if you can. Otherwise, benefits will be permanently reduced, included in income tax calculations, and subject to the earnings limit.

Here are other income considerations you want to think about as part of your overall retirement planning strategy once you have your nest egg perking away. You want to decide:

* the timing and location of your retirement
* the amount and possible taxes of your social security benefits
* how you will take distribution in a monthly draw or lump sum
* how will you withdraw investment money to provide monthly income
* will you purchase long-term care insurance
* will you purchase Medigap policies, Medicare Advantage and Part D plans
* how will you prepare your estate documents
* where will you live
* will you have enough to pay your bills

Don't overlook the benefit of a Work At Home Business, including tax write off benefits.