Social Security Boost

Social Security recipients got a raise in 2004 — but it wasn't much. The average monthly benefit for retired workers increased by about $19. For many individuals, this 2.1 percent increase might not even offset the effects of inflation.¹

Forty-four percent of retirees say Social Security is their largest source of income.² Considering that the average monthly Social Security benefit in 2004 is only $922 for an individual and $1,523 for a couple, it's critical to plan carefully to help maximize this important resource.³

Working Late
The age that you elect to begin receiving benefits can affect the taxation of wages. For an eligible worker who begins collecting benefits before reaching "full retirement age," $1 in benefits will be withheld for every $2 in wages above $970 per month. There is no limit on how much a retiree can earn after reaching full retirement age.⁴

An individual becomes eligible to receive Social Security benefits at age 62, but full retirement age may not be reached for another five years. Electing to receive benefits prior to reaching full retirement age typically means that the monthly benefit amount will be lower; on the other hand, it could be paid over a longer period.

The good news is that Social Security benefits are essentially immune from short-term fluctuations in the financial markets, interest rates, and economic growth. However, the program has well-known, long-term problems that could affect benefits in the future.

1, 3) Social Security Administration, 2003
2) 2003 Retirement Confidence Survey, Employee Benefit Research Institute
4) Full retirement age ranges from 65 to 67, depending on the year of birth.

Send email to webmaster@annuityadvantage.com with questions or comments about this web site.
Copyright © 2001-2011 AnnuityAdvantage.com