Social Security Information for EMC Employees

Social Security is a significant part of the retirement income for most Americans. There are other benefits with Social Security, such as disability and survivors benefits, but we’ll focus on retirement income in this article. We’ll start with a few key facts about Social Security benefits, provide additional resources for you to learn more, and then cover three important areas you should consider when developing your Social Security strategy.

Key Facts About Social Security Retirement Income

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Social Security replaces around 40% of pre-retirement income on average. This percentage is higher, as much as 75%, for lower earners. And lower at around 27% for high earners.

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You can begin receiving your retirement benefits as early as age 62.
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Your monthly payment will increase the longer you delay receiving benefits after turning 62, reaching its maximum at age 70.

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The age you’re able to receive full Social Security benefits is between 66 and 67 depending on what year you were born. Use this calculator provided by the Social Security Administration (SSA) to determine your full retirement age.

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The benefit reduction for beginning your Social Security payments early can be very large. An example from the SSA: “…if you turn age 62 in 2021, your benefit would be about 29.2 percent lower than it would be at your full retirement age of 66 and 10 months.”
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Your benefits may be taxable, depending on your total income and whether you file an individual or joint tax return. This page from the SSA website will help you determine if and how much of your benefit will be taxable.

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Social Security retirement benefits can receive annual Cost of Living Adjustments (COLA). A COLA increases your benefit payment based on an estimate of inflation during the year.

Resources You May Need

SSA.gov

This is the Social Security Administration’s website. You can access information on your individual benefits here as well as other guidance, calculators, and FAQs. You can also find contact information for your local SSA office

Retirement Benefits Brochure

This brochure produced by the SSA has lots of great details on your retirement benefits.

My Social Security

This link allows you to create your online account with the SSA. I highly encourage you to take this step.

Calculators

The SSA provides access to a number of calculators for your use in Social Security planning.

FAQs

This link provides the most Frequently Asked Questions that the SSA receives on retirement benefits.

Your Social Security Strategy

Your decision on when to begin receiving Social Security benefits is a personal one, and you should be very thoughtful in considering the pros and cons of different strategies. Make sure to do plenty of research and consider working with a trusted advisor to evaluate your options.

We help EMC employees and retirees with this decision as part of our comprehensive planning services. We use several tools to evaluate which strategy is the best for each client’s individual situation. Whether you work with us, another advisor, or take a do-it-yourself approach, be sure to fully consider all the relevant facts before deciding when to begin your Social Security retirement benefits.

We help EMC employees and retirees with this decision as part of our comprehensive planning services. We use several tools to evaluate which strategy is the best for each client’s individual situation. Whether you work with us, another advisor, or take a do-it-yourself approach, be sure to fully consider all the relevant facts before deciding when to begin your Social Security retirement benefits.

These are 3 factors you should consider before making your decision. You should review these areas and also read the SSA-provided guide called When to Start Receiving Benefits.

Income Needs

If you need Social Security income to cover basic living expenses and other income sources or investments aren’t available to “bridge the gap”, filing for benefits early may be your best decision. Waiting to start your Social Security payments will increase the amount you receive each month, but that doesn’t do you much good if you’re not able to cover living expenses today! Your decision on Social Security needs to be part of a broad assessment of all your resources, income sources, and expense needs.

Health & Family History

The longer you live, the longer you’ll receive Social Security payments after starting your benefits. We calculate a “break-even age” for clients to help them consider the potential benefits of different Social Security strategies. By deferring Social Security until after age 62, you’ll have some years where you won’t receive the monthly income you would have received if you elected to start benefits early. This “missed income” is compared to the higher payment you’ll receive by deferring to determine how many years it will take for the higher payments to make up for the income you deferred. This type of calculation helps put into perspective the trade-off you’re making when picking a strategy. In general, the longer you expect to live based on your health of family history, the more beneficial it can be to delay Social Security payments.

Spousal Benefits

Your spouse may be eligible for a benefit under your Social Security record. If you’re married, this spousal benefit should be considered as part of your decision. Delaying your Social Security payments would mean higher benefits during your life and could also increase your spouse’s benefits if you pass away first. We often find the best strategy for a couple with one spouse earning more during their working years is to delay benefits for the higher earner. You should look into this strategy if you and your spouse’s income while working were not similar.

Hopefully this primer on Social Security has been helpful for you. We focus on serving the unique needs of Electric Membership Cooperative employees and retirees, and offer free initial retirement consultations to our “EMC family”. Schedule your phone, video, or in-person meeting at this link. Or you can reach the author of this article, Zack Purvis, CFA, at 478-235-2674.


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Halley Hill Wealth Management LLC (“Halley Hill” or “the firm”) is not affiliated with or supervised by any Electric Membership Cooperative (EMC) or the National Rural Electric Cooperative Association (NRECA).

Halley Hill Wealth Management LLC is a Registered Investment Adviser providing advisory services in Georgia and other jurisdictions where registered or exempted. Important information regarding this firm can be located at adviserinfo.sec.gov by searching for the firm name or using its CRD #309507. The firm’s managing member is Zachary T. Purvis (CRD #7258495).

Any information, statement, or opinion set forth herein is general in nature, is not directed to or based on the financial situation or needs of any particular investor, and does not constitute, and should not be construed as investment guidance, a forecast of future events, a guarantee of future results, or a recommendation with respect to any particular security or investment strategy or type of retirement account. Investors seeking financial advice regarding the appropriateness of investing in any securities or investment strategies should consult their financial professional.

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