The Scary Side of Social Security and Retirement

When it comes to Social Security Retirement Planning...you know you have to do it and you just hope you have done it well enough to guide you to financial safety after you retire from your 9-5. Yet most people may not know much more about it than that.

Social Security facts to take into account when planning retirement:

Social Security Retirement Benefits do not automatically start coming in the mail the first day you retire. They must be applied for. The easiest way is to set up an appointment with the local Social Security office or call (800) 772-1213.

To get an official statement of all the earnings recorded in your Social Security account, an estimate of your current disability and death benefits, and an estimate of future retirement benefits, fill out a Form 7004 Request for Social Security Statement, obtainable at your local office.

If you do not find and correct errors in your Social Security record within three years, they become part of your permanent record. So, you might start planning to check on them every three years or so.

If you are planning to work in retirement, you can, but if you earn too much it will reduce the size of the benefits you are receiving from age 62 up to your normal retirement age. The limits on such earnings are currently $14,160 for 2009. Retirement Benefits are reduced by $1 for every $2 that you earn over this amount. Though, the amount of Social Security one "forfeits" because of "excess earnings" does get re-paid to you upon reaching full retirement age via an increase in your monthly payment. After you attain your normal retirement age, you may work as much as you want with no reduction in benefits, although they may become taxable if you earn too much.

You can increase the size of your retirement benefit by delaying collecting your benefits and by remaining on the job past full retirement age. This higher benefit comes from extra earnings toward your account and a credit awarded for this patience, ranging from 3 percent to 8 percent of your benefit depending on your date of birth.

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