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Understanding Social Security: The Options of mySocialSecurity

Understanding Social Security: The Options of mySocialSecurity

For many individuals, understanding what the Social Security Administration offers can be complicated. Yet, the office has recently begun the process of making more information available for individuals online. One of these methods is through the mySocialSecurity, which allows you to determine how much Social Security you may qualify for in the future, as well handling basic requests, including replacing your Social Security card. Yet to determine if you are ready to apply for your benefits, then it is important to consult with your tax professional or accountant, such as L. James & Associates in Denver, CO, to determine the best option for your unique circumstances. Here are a few of the other benefits of the website.

Determining Your Benefits

For many individual taxpayers, determining their benefits, as well as the best time to apply for them may be hard to figure out. If a major life even does not force you into retirement, then it is always better to wait to apply for your benefits. On the SSA website, they provide a calculator for you to determine how much your might receive based on your age and specific circumstances.

In addition, the site provides more information about applying for benefits, how to access your benefits, and a variety of other questions.But what the potential impacts on your tax liability for applying for your benefits early?

Reasons to Apply Early

For those who have had a life changing experience, applying for social security early might just be what they need to do. Here are a few of those life events:

Job loss – Losing your job so close to retirement may make it difficult to find another one. Applying for your Social Security benefits might be the best way to pay your monthly expenses.

Serious Illness – If a serious illness strikes, then an individual might find themselves unable to work and with a much shorter life expectancy. Therefore, it might be the time to take your benefits. Keep in mind, however, that the highest earner in a married couple should hold off as long as possible, to increase the benefits of the surviving spouse in the future.

Lack of Retirement Savings – Many individuals struggle to care for the expenses of life and often have little set aside for retirement. Therefore, when it comes time, they choose to claim their benefits because of a lack of income from other sources.

Pros and Cons

While it might seem to fit the current financial situation to take your Social Security benefits, there might be more reasons not to take your benefits right away. The first reason is simply the benefits themselves. The earlier you take your benefits, the smaller the benefits will be. Then over time, since cost of living increases are based on a percentage of your current benefits, you will have less of a cost of living increase. The longer you wait, however, the higher your benefits will be when you do apply for them. Therefore, your cost of living increases will also be higher. However, once you turn 70, you will receive the maximum benefit available.

It has been estimated that those who choose to take their benefits early will see a reduction of about 25%. However, the benefits at taken at 70 are typically 76% higher. If the fear is dying without taking benefits, the larger concern should be living for a long time with no real funds.

Additionally, if you and your spouse both wait longer, then if one of you passes away, the survivor benefits will be higher for the surviving spouse. However, you need to keep in mind that if you must take your Social Security benefits, it might be best to take the benefits for the lower income spouse, allowing the other higher earning spouse to wait.

Often, when calling the Social Security Administration, it can be hard to get complex questions answered, particularly about taking your benefits sooner. Therefore, it is important to consider to engaging professional help to go through your financial situation. Mistakes in filing can often mean a reduction of your benefits that does nothing but leave funds on the table.

What could make this so complicated? There are simply many moving parts within this system. Answers can vary on your marriage status, divorces, children who might still be in school, and even your health.

As you can see, there are a variety of things to consider before you apply for your benefits. However, it is important to realize that with the automation of the application process, you and your tax professional will be able to complete the process successfully.

Click on the link below to consider the options of your mySocialSecurity account with your tax professional at L. James & Associates in Denver, CO.


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