Social Security
Hi Terry,
My question regards how social security determines monthly benefit based on previous salary. I am a little over 64 years old now and my SS full retirement age is 66 and 8 months. I will be elegible for full SS benefits in November 2024. I inherited a large amount of money recently, and was able to retire from my job, and my investment advisor is investing in fixed income securities to provide income to me beginning in January 2023. My question is will my SS benefit be reduced by the time I reach full retirement age in about 2 1/2 years because my income will be considerably lower than my regular earnings when I was working?
Terry Says
No. Investment income does not count in your base check — only income taxed by SS. BUT, I would wait until age 70 to take SS if you have other income to live on. Your base SS check will increase by 8% a year for every year you wait after full retirement age. And I doubt you will get that kind of return on any other investment in the next 5 years!
PS I started to post this, but decided to add that if your “investment advisor” doesn’t know this find a new one. I suspect that this “advisor” is a broker who is getting a commission on all those bonds — hidden inside the purchase price — and I also KNOW that if you bought bonds even several months ago, rising interest rates mean you already have LOSSES in those bonds. (You don’t have to take the losses by selling them and giving the broker another hidden commission.) There were better ways to plan for income in retirement!
