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Understanding Social Security

In the United States, 87 % of individuals over age 65 receive some form of social security benefits, amounting to some 57 million people. (Source: Fast Facts & Figures About Social Security, 2010)

Yet Social Security remains one of the least understood and most underutilized benefits available to almost every retiree. In recent years, this governmental retirement program has expanded to include benefits such as disability, family and survivor benefits. Even those not eligible to receive a retirement benefit may be entitled to another form of social security benefit from a spouse, ex-spouse or family member.

Social Security is based on a simple premise: Throughout your career, you pay a portion of your earnings into a trust fund by paying Social Security or self-employment taxes. Your employer may also contribute an equal amount. In return, you receive certain benefits that can provide income to you when you reach retirement.

However, navigating the world of Social Security can be anything but simple. The benefits you receive depends on several factors including your average lifetime earnings, the age at which you file for social security and the type of benefit for which you are applying. Claiming strategies vary from one individual to the next and many individuals don’t realize what they might be missing out on.

Other factors such as divorce, the death of a spouse and the number of years worked can have a significant impact on your benefit. Working with a retirement planning and social security professional can help you to get all that you are eligible to receive. You can also estimate your benefit online based on your actual earnings record using the Retirement Estimator on the social security website at

Riley Crosbie, CPA, CFP®, our resident social security and retirement expert recommends that “any retirement planning should have the goal to align your wealth and your life. Social Security should be thought of as a part of a wider retirement plan, taking into consideration your goals, needs, fiscal responsibilities and legacy. By fully understanding your larger financial picture, you are better equipped to decide when and how to begin receiving your Social Security benefits.”

When Should I Take Social Security?

Your Social Security retirement benefit is based on your highest 35 years of earnings over your working career and the age at which you start receiving Social Security benefits. For those born between 1943 and 1954, your full retirement age is 66. Full retirement age (the age at which you are entitled to receive your full retirement benefit) increases in two-month increments thereafter, until it reaches age 67 for anyone born in 1960 or later.

However, you don’t have to wait until full retirement age to begin taking Social Security. Regardless of your full retirement age, you can begin receiving early retirement benefits at age 62. Doing so can in certain circumstances be advantageous: Although you’ll receive a smaller benefit amount if you retire early, you’ll receive benefits for a longer period than if you had retired at full retirement age.

Choosing to delay receiving benefits past full retirement age is also an option and may be right for you. If you delay retirement, you will receive an 8 percent increase for each year you delay. An individual can receive delayed credits until age 70. A retiree with a full retirement age of 66 who elects to delay receiving benefits until age 70, will receive 132% of their retirement benefit.

The Social Security Administration has said “A secure, comfortable retirement is every worker’s dream. And now because we’re living longer, healthier lives, we can expect to spend more time in retirement than our parents and grandparents did.

Achieving the dream of a secure, comfortable retirement is much easier when you plan your finances.”

To schedule a complimentary retirement and social security consultation, call 435-752-1702 or visit


Adams Wealth Management is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.

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