Will You Retire or Keep Working?

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By Bennett Whitlock, CRPC®
Private Wealth Advisor

Your answer may impact your Social Security check. One of the most important decisions you will make in retirement is when to begin receiving your Social Security benefits. Yet this decision often depends on whether you plan to retire or keep working. Here are some considerations.

When you can claim Social Security benefits

Social Security award starts with full retirement age, or the age at which you are eligible to receive full retirement benefits, which is determined by your year of birth, earnings history and other factors. For those born between 1943 and 1954, full retirement age is 66. For those born after 1959, it gradually increases until it reaches 67. You can check with the Social Security website (SSA.gov) for your full retirement age.

The Social Security rules offer some flexibility to apply for lower or higher monthly benefits. You can file for a lower benefit as early as age 62 or delay the start of your checks to receive a higher benefit until as late as age 70. Beyond the age at which you choose to file for benefits, the amount you will receive monthly depends on whether you decide to work.

Four common scenarios

1. Retire and claim Social Security early: If you decide to apply for benefits early, you will receive a reduced amount.
Pro: You can use Social Security to pay for immediate expenses, while your other retirement savings have
time to continue to grow.
Con: Your monthly check can be reduced by up to 25 percent or more compared to the amount you would be awarded at full retirement age.
2. Keep working and claim Social Security: You are allowed to apply for benefits and continue to work.
Pro: This is a common approach for retirees who choose to pursue part-time work. It allows for a steady
stream of income and gives your investments time to continue to grow.
Con: If you are under full retirement age, your check will be further reduced if you exceed the annual earnings limit. If your Social Security benefits are reduced because you work, they will be increased when you reach full retirement age. However, Social Security benefits can be subject to tax.
3. Retire and wait to claim Social Security: If you defer your retirement benefits beyond your full retirement age, you will get a bigger monthly check when you start taking benefits.
Pro: Delaying benefits may be advantageous if your expenses are manageable in the future, and you expect to live long enough to make up for postponed benefits.
Con: You may need to start drawing down other sources of income in the interim. Doing so may generate less investment growth.
4. Keep working and wait to claim Social Security: If you expect to rely on income from a job in retirement, you may consider waiting to claim benefits.
Pro: You to continue building your nest egg with additional savings, while your Social Security benefits
grow too.
Con: You may not be able to choose your retirement date. A negative event could affect even the best-laid
plans, so have a contingency option in place if you choose this approach.

These are only the most common scenarios. For guidance, visit the Social Security website (SSA.gov) and consult a financial advisor.

Bennett Whitlock, CRPC ®, is a private wealth advisor and managing director with Whitlock Wealth Management, a franchise of Ameriprise Financial Services, Inc. Learn more at WhitlockWealth.com or call 703-492-7732.


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