Maximize Social Security Benefits When You Retire
Planning an early retirement? 415 Group Manager Nathanial Arps, CPA, MSA, shares his insight on collecting your full social security benefits and protecting your retirement savings:
It’s never too early to start thinking about retirement. But if you plan to retire before you’ve reached your full retirement age — which is set by the IRS — and you draw from social security while earning income, you’re going to get penalized on your benefits.
We tend to see this with business owners as they’re transitioning ownership. Some owners sell the business to an outside party, while others pass the business down to the next generation. If they decide to keep it in the family, it is often difficult for them to completely severe ties with a business that they’ve worked hard to build. They want to continue to be involved and earn income.
For those who decide to retire before they’ve reached their full retirement age, they have several options to reduce their earned income, whether it’s through deferring compensation until after reaching your full retirement age, creating a self-employment loss to offset excess self-employment income, incorporating sole proprietorships or by shifting income to others through a partnership (i.e. spouse or minor children).
If you’re considering an early retirement, it’s important to speak with a tax professional first. At 415 Group, we help our clients review their assets and personal balance sheet to identify income and potential liabilities. We’ll help you determine how much money you’ll need in retirement to live comfortably. We take the time to examine everyone’s personal situation and guide them through their best options, so they don’t miss out on collecting the full social security benefits they’ve worked hard to earn.