Welcome to the Tax Insights Podcast, where we break down complex tax topics into bite-sized how-tos. In this episode of Tax Insights, Jeff Dvorachek explores the multifaceted world of Social Security. Join us as he breaks down the fundamental dates and considerations, helping you make informed decisions about your Social Security journey.
Host: Jeff, today we’re talking about Social Security. Lots to talk about here, specifically options for listeners, maybe what ages they can start to take Social Security. Walk us through all this.
Jeff: Yeah, so that’s kind of a big question that we get asked and others get asked is, you know, when should I take out my Social Security? When can I start taking out my Social Security? And you know, although it depends on your particular situation, there is some baseline that you should probably know to help you kind of be informed of making that decision.
Host: Okay, so walk us through some of these baseline, some of these basic information that people should just be aware of when we are talking about Social Security.
Jeff: Yeah, there’s really three dates to look at. So the first date is, you know, what’s the earliest that you could take it out and that’s age 62. So you can take it before 62 but you can certainly take it at 62 or later.
Host: Okay.
Jeff: The second date to remember is, you know, what your full retirement age is. And your full retirement age just kind of depends on when you were born. So that’s going to be somewhere between ages 66 and 67 for people.
Host: Okay.
Jeff: And then the third date to know is when you reach the age of 70 because at the age of 70, then you have to start taking it.
Host: Okay, so then you were forced to take it at that time.
Jeff: Yeah, so those are the three dates to really look at and of course, you know, as you can probably figure, if you take it at your full retirement age, you know, somewhere like 66, 67. The benefit is going to be higher than if you took it early.
Host: Right. Absolutely. You’ll have more in there.
Jeff: Exactly. And then let’s say that you don’t take it at your full retirement age, you go all the way to 70. Well, that’s even going to be more yet. So that’s that scale on how much social security you’re actually going to get, which not only depends on how much you made over your lifetime, but when you decided to take it.
Host: Right. So talk about, you know, the tax implications on this. You know, is all this tax at that time? Is it is a tax free walk us through this?
Jeff: Yeah and so maybe what we’ll do is let’s talk about that maybe next week a little bit more because it can get a little bit complicated because it really depends on your income.
Host: Got it. It depends on your lower income individuals will have less of their social security actually taxed to them.
Jeff: Sure. Where if you have higher earnings, there will be more.
Host: Now I know that oftentimes people or at least younger adults always wonder, always ask the question, is social security even going to be there for me? And, you know, nobody has that the magic eight ball. I don’t know if you can share some of your thoughts or insights on that, but I know that that is something that, again, a lot of young people always question. Is it even going to be available?
Jeff: Yeah, and I would say it’s going to be available just because there’s so many Americans that actually are going to rely on it and rely on it right now. For sure, I don’t see them changing any current beneficiaries numbers. How much are you going to get? But there may be a decrease, you know, for some people in the future, maybe if you earn a little bit more, maybe you’re going to get a little less social security. And, but I really don’t see it going away or really changing drastically for those that really need it.
Host: Okay, Jeff, a lot of great information for our listeners. Again, you know, that’s 62, 66, 67, 70. Those are some key numbers for listeners to be aware of when we’re talking about social security. Jeff, if people have questions, if they want to connect with you guys over at Hawkins. What’s the best way of reaching out to you and the team?
Jeff: I would go right to our website, which is HawkinsAsh.CPA, and I would go to that CPA-HQ section.
