Many people believe Social Security will pay for their retirement, but Social Security was designed to be just a complement to a pension and investments. So don’t rely only on Social Security for your retirement because it probably won’t be enough to maintain your current lifestyle. However, planning for your Social security benefits is important.
Many retirees decide to wait until age 70 to draw on Social Security benefits because you can increase your benefits significantly by delaying the age at which you retire. However, remember, at age 70 ½, you must begin taking the required minimum distributions from an IRA, which also adds to your taxable income. Be aware that in retirement, tax deductions may be reduced, resulting in more taxable income. You can plan for your Social Security, investments and pensions to all work together to reduce your tax burden. Sustainable lifetime income is the goal so you need to have a plan for all sources of income to work together in your retirement.
Need help with your plan? We can work with your tax professional in order to help you develop a Social Security strategy. Call us today. We’re here to help.