Social Security is essentially a government-run pension designed to provide a guaranteed lifetime income. You pay into it during your working years, and can begin receiving distributions as early as age 62. Many people don’t think much about this very complex program until they’re ready to retire.

As with a private pension plan, Social Security provides many payout options. If you select one that doesn’t provide the optimum payout, you could be leaving thousands of dollars on the table. The decision to take Social Security should be based on three main criteria:
When, How, and Taxes and Penalties.


You can start receiving individual benefits as early as age 62 and defer taking benefits to as late as age 70. The timing is important because the amount you collect varies based on your starting age. For those born between 1943-1954, age 66 is considered your Full Retirement Age (FRA).

At FRA, you are eligible to receive 100% of your benefit. If you start receiving payments before that age, your benefit will be reduced. Conversely, your benefit will increase if you begin payments after FRA.

Once you make this choice, it can’t be reversed. Before you act, let us guide you through the options their consequences to avoid a wrong decision.


The majority of retiring workers think of Social Security as a type of pension, one they can start early with a reduced payment or at full retirement age with full payments. But retirees fail to realize there are over a dozen different ways to file for Social Security.

These are some of the most common:

  • File on your own benefit
  • File on your spouse’s benefit

These are some of the most commonly underused:

  • File on your ex-spouse’s benefit
  • File and Suspend
  • Benefit Switch
  • Buy Back Withdraw

One of the least-used ways to file was recently instituted via the Senior Citizens’ Freedom to Work Act. It is so new that some Social Security Office employees do not know it exists. We can help you maximize how you take Social Security to get the most money throughout your lifetime and your spouse’s.

Taxes and Penalties

Both the Social Security Administration and the Internal Revenue Service (IRS) impose stringent taxes and penalties that could apply to your benefit. Most people are unaware that Social Security is only initially a federal tax-free benefit. Without proper planning, the IRS might view as much as 85% as taxable income. We can show you how to draw Social Security in connection with other income sources to avoid benefit taxes and penalties.

  • Drawing Social Security while still working:
    If you begin collecting Social Security before Full Retirement Age and continue to work, your benefit is subject to reduction. Two formulas may apply, one from age 62 to your Full Retirement Age, the other in the year of your Full Retirement Age up to your birthday month. We’ll help you calculate how these reductions would impact your benefit levels.
  • Taxation on Social Security benefits:
    Social Security is a federally tax-free retirement benefit unless you exceed certain total income levels. This formula is used to determine the taxability of your Social Security:

    Total Income = Adjusted Gross Income (AGI) + ½ of your Social Security + Non Taxable Interest

    Your adjusted gross income includes income from working, interest, dividends, real estate, capital gains, Traditional IRA distributions, pensions, etc. Your allowed threshold of income depends on your filing status: Married Filing Jointly, Married Filing Separately, or Single. Let us help you gauge how much you can earn without incurring taxes on your income.