Initial Financial Plan:
For a CPA,
Financial Advisor who has
worked with lots of other newlyweds and is familiar with the issues that
retirement benefits from social security will be around for a long,
long time. Even so, don't count on a monthly social security check as
your only source of retirement income.
being said, the basic rules for social security, as they currently
stand, are as follows:
be eligible to collect social security, you need to pay into the
system for at least ten years. You
pay into the system if you are an employee and have the 6.2% social
security tax withheld from you salary each pay period, or if you are
self-employed and pay the 15.3% self-employment tax as part of your
federal income tax return.
the Social Security Administration calculates your benefit when you
retire, your benefit will be based on your 35 years of highest
you work less than 35 years, each non-working year will still be
factored in, thus reducing the benefit that you will be entitled to receive.
you were born after 1959, your full retirement age will be 67. Full-retirement
age has been 65 for many years. However, beginning with people born
in 1938 or later, that age will gradually increase until it reaches
67 for people born after 1959.
though the full retirement age is increasing to age 67, you can
still begin to collect your social security retirement benefits upon
turning age 62. A
person born after 1959 who starts taking benefits at age 62 will
forfeit 30% of his annual retirement benefit for life. If you start
collecting social security before reaching full retirement age, you
will forfeit approximately 0.5% of your benefit for every month you
you reach full retirement age (age 67 if you were born after 1959),
you can earn any amount of income without giving up any of your
social security benefit. Prior
to reaching full retirement age, a person collecting social security
will forfeit $1 of benefit for every $2 of earned income over a
certain threshold ($10,080 in 2000).
you delay collecting from social security until after reaching full
retirement age, your annual benefit will actually increase by as much
as 8% per year until you reach age 70. Once
you reach 70, your benefit will no longer increase, even if you
continue to delay collecting.
you are married, you will receive the greater of your earned
benefit, or 50% of your spouses full retirement benefit, subject to
great place to get more information about your projected social
security benefit is from the Social Security Administration's website
which can be found at http://www.ssa.gov.
In addition to containing plenty of easy to understand information,
their site contains a calculator which enables you to calculate your
projected benefit based on whatever criteria you enter.