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Health & Fitness

How much will I get?

Workers who pay into the Social Security system through FICA withholdings or self employment taxes paid on Schedule-C are accumulating benefits for their eventual retirement. The Social Security component of your retirement income is determined by a number of factors such as number of years employed, amount of earnings, when benefits are taken, employment not covered by social security. Your Average Indexed Monthly Earnings (AIME) is the inflation adjusted formula used to determine your Primary Insurance Amount (PIA) which is the benefit available at your Full Retirement Age (FRA) that is determined by the year you were born. Your highest 35 years of earnings are used to determine your AIME with a minimum of 10 years or 40 quarters of employment to qualify for income benefits. Timing of the start date for collecting Social Security benefits has a huge impact on the SS income received. There is up to a 72% spread in SS income benefits between starting at age 62 or delaying until age 70. The start date also affects spousal income benefits as well as survivor benefits. This can be an important factor when the spouse has a limited work history. There are 7 different filing strategies for a couple with 567 different possible data points to contemplate. Making the wrong choice can be a costly mistake. You can start collecting benefits at age 62, however the benefits are reduced by 25% and wages before the year full retirement age is reached will cause a $1 reduction of benefits for every $2 earned over the 2013 $15,100 earnings limit. The earnings test haircut drops off at Full Retirement Age. There is an 8% simple interest Delayed Retirement Credit (DRC) increase for every year past full retirement age income benefits are delayed. Having one spouse paying into Social Security and one covered by a government pension further complicates Social Security benefits planning with Windfall Elimination Provision (WEP) applying to a spouse covered by both SS and government pension benefits and Government Pension Offset (GPO) rules affecting spousal and survivor benefits to navigate. To learn more about Social Security, please register to attend a free Smart Social Security Webinar on June 25, 2013 at 2:00 PM EST by registering on: WWW4.gotomeeting.com/register/370717695 Tom Brown can be reached at (860)794-6294 to answer your specific questions.

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