3 Tips to Help You Better Understand Your Social Security Benefits

1. Up to 85% of Social Security Benefits Can Be Taxable: Depending on your income, up to 85% of your Social Security benefits can be taxed. It is easy to contact the Social Security Administration and request Federal Withholding. Having taxes withheld from your Social Security benefits can help retirees avoid a surprise when tax season arrives.

2. There are 4 Federal Withholding Tax Rates to Choose From: You can choose a withholding rate of 7%, 10%, 12%, or 22%. We recommend consulting with your tax preparer to determine the optimal rate for your situation and reviewing it periodically as your income changes.

3. You Have Options As To When You Begin Receiving Your Social Security Benefits: You can start receiving your Social Security retirement benefits as early as age 62. However, if you start receiving benefits early, your benefits will be reduced by a small percentage each month until you reach full retirement age.

   
   

To recap, up to 85% of your benefits can be taxable, you can choose from 4 federal withholding options to stay in control, and timing matters. Your choice of when to start can impact your monthly benefit for life. Understanding how Social Security works can save you so much money and stress. Want help making the smartest choice for your situation? Let's talk.