Amy & Dan Smith's Planning for Life: A Social Security Strategy Could Enhance Your Retirement Income Plan

What do you think of when someone mentions Social Security? Many people consider Social Security and retirement as one and the same. More than 90 percent of working Americans plan for Social Security to replace part of their current incomes when they leave the workforce. Sadly, what really happens is that, because of timing decisions, 75 percent of those already receiving benefits are drawing a reduced amount.*

Your benefits can be greatly affected by your specific circumstances during retirement. Your monthly payment amounts as well as your tax status can change if you decide to work part time or start a second career. There is also your and your spouse’s beneficiary eligibility to consider.

Baby boomers – on average – are living longer than any previous generation. While that’s good news, it also presents several new challenges. A longer life increases the likelihood that you’ll have increased medical and long-term care expenses. The value of your nest egg will be more significantly impacted by increases in the cost of living over a longer term. And, quite simply, you could outlive your money.

One important aspect of planning for your later years is factoring in the benefits you will be entitled to once you reach retirement age. The Social Security Administration website ( provides you with a useful online tool to determine your likely benefit amount as well as your earnings statement. Registration is required. But, once you establish an account you can check your earnings record and benefits estimate at any time, day or night. No more waiting for your quarterly statement to arrive in the mail!

It’s important to check your earnings once a year to make sure the SSA is recording your income accurately. If your income is being under-reported, it could reduce the amount of benefits you receive.

When you consider all these factors, it’s more important than ever to make calculated decisions about when to begin drawing Social Security benefits within the context of your overall retirement plan. Alongside other sources of income, Social Security is a critical asset to plan for in retirement, so it’s important to develop a strategy to maximize the value of it. Evaluating a number of decision factors can help you maximize your Social Security retirement benefits and even your survivor benefits.

Over the coming months, I’d like to present an overview of the critical factors that relate to your benefits including:
Your age: When should you draw benefits?
Your job: How do earnings impact benefits?
Your taxes: How are benefits taxed when combined with other retirement?
Your marriage: How do spousal benefits work?
*Source: Social Security Administration

From "Amy & Dan Smith's Planning for Life" column appearing monthly in the Blue Ridge Leader, Loudoun County, VA.

The foregoing article contains general legal information only and is not intended to convey legal advice.  For legal advice regarding estate planning, the reader should contact his/her lawyer.

Daniel D. Smith is a partner in the law firm of Smith & Pugh, PLC, 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-777-6084, He has practiced law in Loudoun County since 1980.