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social security, social security benefits, retirement income, wealth management, retirement planning

Social Security benefits are an important piece of your retirement income puzzle, and deciding when to start taking Social Security payments depends on a number of factors that should not only be considered individually but should be evaluated on how they work together with your other retirement assets.

We make an important distinction between optimizing and maximizing. There is no question that maximizing Social Security benefits simply means that you wait until age 70 to take your benefits because your Social Security payments will have increased to their maximum amount and you will receive these payments for the rest of your life.


Optimizing your retirement strategy by applying for social security benefits | Outlook Wealth Advisors

Focusing solely on the amount of Social Security payments while failing to consider your total picture may not be wise. As with every important decision, considering various opportunity costs will help you better understand the choices available to you.

Because of inflation, $1 at age 62 is worth more than $1 at age 68. Additionally, $1 taken earlier has more time to grow and benefit from compound interest than $1 taken later. So you must consider your break-even point when deciding whether to take Social Security benefits. The Social Security system is designed so that most people’s break-even point falls around age 80. Thus, considering your health and life expectancy up to and past the age of 80 is essential. If you are not likely to live long enough to benefit substantially past your break-even point, it may not be in your best interest to wait until age 70 to start collecting Social Security.

Puzzle showing the connections of Retirement Income with Pension, Savings & Assets, Social Security and 401K | Outlook Wealth Advisors


Optimizing, on the other hand, requires you to take a holistic view of your financial picture. Apart from considering the time value of money and your health and life expectancy, there are many other elements to examine. We describe three of the most common considerations below.


As you know, it is possible to start taking Social Security benefits at 62, before your full retirement age (FRA). Although the payments will be lower because you’re receiving Social Security benefits for a longer period of time, some people do choose this option.

However, it is important to consider other income sources should you decide to take Social Security benefits early. If you are still working and make above a specific amount, your Social Security payments can be reduced by as much as $1 for every $2 you earn. These reductions would eventually be returned to you once you retire, but knowing these reductions are happening often discourages still-working individuals from taking advantage of Social Security earlier.


Although taxes are no one’s favorite subject, tax planning in retirement is essential to holistic wealth management. In fact, there are more options in retirement tax planning than in tax planning during your working years. Rather than doing “reactive tax preparation,” which is what most people engage in during their working years, retirement makes it easier to engage in “forward tax planning” because you have more control over which income resources you pull from.

Forward tax planning involves strategically structuring your investments so that, due to Social Security taxation formulas, your benefits are not showing up on your tax returns. Up to 85% of your Social Security benefits can be taxed at your income tax bracket if your provisional income is not manipulated by properly structuring investments. Medicare premiums can also rise if investments are improperly structured, so working with an experienced financial planner who can assist with tax mitigation strategies is critical.


Your spouse’s Social Security benefits will be directly impacted by your decision on when to start taking your benefits, even if they also have an earnings history. Your spouse’s benefits can be permanently reduced should you choose to take benefits early. However, spousal benefits will not increase past your FRA, so delaying taking benefits in order to increase your payments does not apply to your spouse’s benefits.

Navigating spousal benefits, even if both spouses have an earnings history, requires careful and strategic planning to ensure that you are filing for benefits at the best time for both you and your spouse.


Liquid assets | Outlook Wealth Advisors

Optimizing Social Security benefits is an enormously complex process, and there is no one-size-fits-all approach. It is essential to partner with a holistic, fiduciary financial planner like Outlook Wealth Advisors in order to make decisions that work in your best interest.

Award-winning CPAs and CFPs, the financial advisors at Outlook Wealth Advisors, offer a unique, holistic perspective most other firms simply cannot offer.  They have assisted retirees and pre-retirees manage wealth and prepare tax-friendly retirement plans over 25 years. Email us at or call 281-872-1515 to get started.