Money Matters: the importance of social security benefits

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It’s one of the most important financial decisions people will make: when to receive social security benefits.

April is national social security month. Local financial professional Barry Bigelow from Great Waters, discusses the importance of social security and what to consider to make the most of the benefits.

When it comes to how big of a decision is it to claim social security benefits, Bigelow says social security is often one of the biggest sources of income in retirement, and there are hundreds of ways to file.

"Patience is the key. Social security benefits will start about a month after you claim them — my advice is to wait until you really need to, or want to, claim them so that you get the largest benefit possible."

Some other tips include:

Reviewing early
• When you are approaching retirement, create your social security account and review your earnings record online.

Waiting to file
• You can file for social security early at age 62, but you will not get your full benefit until you hit full retirement age, which is 66 or 67 depending on the year you’re born.

Understanding taxes
• Social security benefits are tax-advantaged, which means you won’t have to pay taxes on all of your income.
• You could be taxed on anywhere from 0% of your benefits to up to 85%, depending on how much you make.

Looking at the full picture
• Social security typically makes up around 40% of the income an average retiree brings in each year.
• When you make your filing decision, you can’t look at it in a vacuum; instead, you should be performing a detailed analysis of your entire financial picture.