Social Security Benefits Can be Reduced in Several Ways…It’s Important to Know the Rules!
Once the decision to file for Social Security benefits has been made, most folks weave the amount of their monthly payment into their financial picture and sit back for the long haul. That’s fine, but you need to understand that there are circumstances that can lead to that monthly payment being reduced, as explained in a nasdaq.com post by GoBankingRate’s Andrew Lisa (click here for the full post). Beyond the reduced benefit caused by filing before your full retirement age (FRA), he notes situations that can cause the monthly benefit to diminish. Among these are the impact of the earnings test faced by early filers (although not included in the post is the mathematical fact that the reduced benefits are not totally lost and are subject to a recalculation of your base benefit when you reach FRA) and, of course, the annoying federal taxation of benefits for those exceeding thresholds established 50 years ago and never adjusted for inflation. His discussion on the rules associated with Social Security Disability Insurance (SSDI) is also important to understand, since there are several factors that can cause this benefit to change over time.
Read Lisa’s post here and, if you have any questions or need any additional on these rules, know that the AMAC Foundation offers a free-to-the-public Advisory Service that can help you. Learn more about this service and how to access it here.