Good Financial Reads: The Scoop on Social Security

For many of our clients who are working near the end of their careers the natural next question that comes to mind is when do I take Social Security benefits?  Over the life of your career you have continuously been paying into Social Security.  It makes sense you would want to maximize any available benefit that you could receive.  This allows you not to have to lean on your outside savings nearly as much.

Don’t worry, we are not talking about the chances of a blow-up of the Social Security fund. We are talking about the interaction between the taxation of Social Security and other sources of income, and potentially high tax rates resulting from it. 

Social Security benefits are an important part of any financial plan. Yes, there are concerns that the system could run out of cash. According to the program’s trustees, the Social Security Trust Funds are projected to become insolvent in 2035. That could lead to benefit cuts or an increase in the retirement age – full retirement age is 67 for those born in 1960 or later.

Faced with uncertainty in markets and the economy, asset managers, when possible try to hedge away unwanted risk.  They… uh, WE… focus on areas where we can add value through smart decisions; using all of the analytical tools we have at our side.  Sure, we get paid to take risk, but we want to be smart about it.

If you’re at all familiar with federal programs and taxation, I hope you chose c without any hesitation.  Tax issues are never so cut-and-dried that they can be answered with a simple ‘yes’ or ‘no’, which is somewhat fortuitous, because this would be a very short blog post if they were!