INSIGHTS

January 7, 2025

Manager Perspective

Taking Social Security

Social Security represents a significant source of income for most retired people, yet many don’t understand their choices. Deciding when to take Social Security can be complicated because recipients have considerable flexibility regarding when they can begin getting benefits. In most cases, philosophically, Tandem believes that it is best to take Social Security if you are no longer working. However, each person’s situation should be evaluated individually. Here is some information that can help as you consider your options.

C. Angus Schaal, CFP^®

Senior Managing Director

Deciding When to Take Social Security

When You Can Start: You may start receiving benefits as early as age 62; however, your benefits will be reduced by about one-half of 1% each month you begin taking Social Security before your full retirement age. The full retirement age is 67 if you were born in 1960 or later. If you were born before 1960, your retirement age will be lowered depending on your birth year.

Delaying Benefits: If you decide to delay receiving benefits until after reaching your full retirement age, your benefits will increase by 8% annually. Under current law, this increase will be automatically added each month from the moment you reach full retirement age until you start taking benefits or reach age 70 (the age at which these delayed retirement credits stop accruing). In addition, your benefits will also increase by any cost-of-living adjustments made to benefit payment levels during that time.

Staying in the Workforce: You can still receive full benefits if you decide to keep working. In fact, working past full retirement age can increase your benefits. However, your benefits will be reduced if your earnings exceed certain limits. If you decide to receive benefits before full retirement age but remain employed, your benefits will be reduced by $1 for every $2 in earnings above the current annual limit ($22,320 in 2024).

If you keep working during the year in which you reach full retirement age, your benefits will be reduced by $1 for every $3 in earnings over a different annual limit ($59,520 in 2024) until the month you reach full retirement age.

If you continue to work after full retirement age, your benefits under current law will not be reduced regardless of how much you earn.

Check Current Benefit Rates Before Deciding: Be sure to contact Tandem before making any Social Securityrelated decisions, as benefit amounts change often. (The information in this document is current as of March 2024.)

Resources
Social Security Administration: www.ssa.gov/retirement
AARP: www.aarp.org/retirement/social-security

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