Cooper Family Newsletter

NEXT MEETING:

     Brothers & Sisters

Family Virtual Meeting

 October 28, 2023

4pm

 If interested in attending the meeting, you can contact me for login information

Social security facts

The average American is receiving monthly Social Security retirement payments of $1,837, according to the Social Security Administration (SSA). Social Security benefits represent almost one-third of income among the elderly. And for some within that group (12% of men and 15% of women), these benefits account for 90% or more of their total income.  After spending a decade or more paying into the Social Security system, the last thing you want is to get shortchanged because of a reduced benefit. If you work while receiving Social Security, the SSA may withhold part of your benefit if certain conditions aren't met. 

Are you ready for your first year of retirement? Here are 4 things you might not expect but need to prepare for:

The adjustment period, even if you have a smart plan for retirement, there’s still an adjustment period where leaving the labor force means far less money coming in and more going out. And let’s face it, pre-retirement habits and assumptions can be difficult to change.  Make sure to look over your budget before you retire, not after. Where and what do you spend on? What’s your projected cash inflow? 61% of Americans are more afraid of running out of money than dying.

Prioritize your expenses, want to travel? It’s a delicious luxury but it’s incredibly expensive when you factor in food, 

lodging, flights and frequency of trips. Want to renovate your home or buy a seaside getaway? Interest rates on first and second mortgages these days are through the roof.  Before you break open the coffers and live it up, get a sense of your “nice to haves” versus your “need to haves.” You can also take steps to lower the cost of those “need to haves” so that you’ve got more money left over for the fun stuff.

Keep adding to your savings, once it’s time to retire, many folks throw their savings plan out the window of the cruise ship or dream home. That’s the wrong way to go. Saving not only offers a buffer but also a means to make even more aspirations possible.  If you once put 10% of each paycheck aside, you could now aim for 10% of each Social Security check. Even just 5% is better than nothing, especially if you invest it wisely.  Yes, the stock market may be rocky these days, but there are other ways to invest for your future than just dumping your savings into stocks.

Have a Social Security strategy. If you take your Social Security starting at age 62, you’ll miss out on additional funds you’d reap at a later retirement age, according to the Social Security Administration (SSA).  If you wait until you hit 66, the SSA calculates that you’d reap $1,000 instead of $750. Further, you could receive delayed retirement credits should you wait until full retirement age, which stops when you reach 70.

You can work and still receive Social Security if you have reached your full retirement age, which is between 66 and 67 depending on your birth year. This is true no matter how much income you earn.

If you are under your full retirement age and earn more than a specified annual income limit, you may receive a reduced benefit. How much the SSA deducts from your benefit will depend on the amount you earn and your age.

In 2023, your Social Security will be reduced as follows based on your age and earnings. Under full retirement age: the annual earnings limit to receive the full benefit is $21,240, and you will be deducted $1 for every $2 you make above this limit.

The year you reach full retirement age: the earnings limit is $56,520 but only earnings up to the month before you reach full retirement age are counted; you will be deducted $1 for every $3 you make above this limit.  Full retirement age and older: there is no annual earnings limit, and therefore no deductions to your Social Security benefit.

If you earn less than the limits listed above, you are eligible for Social Security you’re entitled to.