No Increase Could Mean a Net Decrease
For many recipients, the impact of flat Social Security Benefits in 2010 could be even greater than it seems.

• Recipients who have their Medicare Part B premiums withheld from Social Security, and whose incomes are greater than $85,000 (or $170,000 for joint filers), will see an additional 15% deducted from their checks.
• The possibility of growing inflation remains a real concern for many watching the U.S. economy’s recovery from the recent global crisis, meaning recipients could be forced to pay more for standard of-living items on a lower net budget.

When You File Can Make a Difference
If you’re at or approaching retirement age, the decision whether or not to take Social Security benefits should be made strategically, considering all aspects of your financial picture. Workers are eligible to begin benefits at age 62, but many continue to work well beyond that age. Until a worker reaches Full Retirement Age (FRA), which is generally between 65 and 67, income earned as an employee or while self-employed and receiving Social Security benefits can greatly reduce or eliminate those benefits.

Once a worker reaches FRA, however, that person can have unlimited earnings and not see their benefits reduced. Therefore;

• If you retire early, starting Social Security can replace a portion of your lost income, but will result in a permanent reduction for taking benefits before FRA.
• If you stop working and defer benefits until later, consider whether or not you have other income that can provide support until you reach FRA.
• Health and family history matter. In general, the longer you expect to live after retirement, the better off you are deferring your benefits.
• If you have a spouse, minor or disabled children, or dependent parents, all may be eligible to collect benefits based on your earnings history. Taking benefits early and allowing other family members to receive benefits, even if for a relatively short time, could be more advantageous than deferring in some cases

Social Security Should be Part of a Broader Plan
Whether you’re currently receiving benefits or thinking about starting, Social Security should be one of several components in a comprehensive retirement savings and income plan.

• Personal investment accounts, an employer pension, or even part-time work can all help bridge the expense gap during the early years of retirement.
• The delayed retirement credits you receive for deferring your benefits until you reach FRA could be less than the investment return you could have earned on your personal savings.
• There are advanced planning strategies, which you can discuss with a Financial Advisor, designed to help individuals, couples and families maximize their Social Security benefits within their lifetimes.

If you’re currently receiving Social Security benefits and haven’t accounted for the lack of a cost-of-living increase in 2010, or if you are wondering when it makes the most sense to start receiving benefits, you should talk to your Financial Advisor about your specific situation and long-term financial goals.