Social Security and pension are the two main ways to fund your retirement based on your income. Since your retirement fund may be dependent on these factors, it’s important to learn more about how these tools work so that you can get the most out of your savings to better enjoy your time when those anticipated years come along. This information may be a lot to take in, but the knowledgeable financial advisors at Maggi Tax are here to help break it all down for you with these useful tips!
1. Understand How Social Security Works
What is Social Security, exactly? The taxes that we pay are used towards these retirement funds, so understanding the specifics of Social Security can help you plan and make better decisions rather than just sitting back and letting things run their course. The amount that you receive during retirement is calculated by using your highest 35 years of income with the full retirement age being 67. You have two options when it comes to Social Security. You can claim your retirement before that age, or you can wait to claim it.
2. Know When To Claim Early And When To Wait
If for whatever reason you choose to claim your retirement early, you risk earning less per year toward your funds. This may seem like an option that you want to avoid no matter what, but some individuals will take this route in order to enjoy their money sooner while continuing to earn, despite the rate being lower. Of course, you can choose to wait until the full retirement age to claim your funds which will guarantee you full benefits, but people often worry that they won’t be around long enough to enjoy all of the cash that they earned.
3. Learn The Differences With Pension
Pension is similar to Social Security in the fact that it is also based on your income with the main difference being that Social Security is issued by the government while pensions are provided by employers. Keeping that into consideration, pensions may not be transferable if you leave for another job. But if you plan on continuing work at the same place, you can receive added benefits for your years of service and overall income with the same employer. Just keep in mind that there may be some credit risks involved.
4. Seek Out A Financial Advisor
The best thing that you can do is to gather all of the necessary information between your Social Security and pension to come up with a personalized plan that makes the most out of the benefits that each one has to offer with minimal downsides. If you’re not quite sure how to manipulate this information to your advantage, a trusted financial advisor can help you discuss your options and recommend the best plan for you.
Need Help Planning Your Retirement? Maggi Tax Is Here To Help!
At Maggi Tax, we specialize in retirement income planning so we can help evaluate your situation and help you devise a retirement plan that works best for you and your needs. Call the office anytime at (727) 799-1701 to request a complimentary consultation! We look forward to helping you achieve the retirement that you deserve.
