Hi there! 👋
Do you ever wonder how much you might be eligible to receive in Social Security retirement benefits?
We do need to be saving a portion of our earnings for retirement. But chances are you have also been contributing to Social Security through the payment of FICA (e.g. Self Employment) taxes and will be eligible to receive a monthly retirement benefit.
How big might your monthly Social Security benefit be?
Great question! The easiest way to figure that out is to create an account with the Social Security Administration (“SSA”) and download your social security record. The SSA website also offers some great tools to estimate how changes in your earnings might impact your monthly retirement benefit.
Click on the image below 👇 to watch a video where I’ll walk you through the (reasonably) simple process step-by-step!
Benefits of creating an SSA account! 👍
Creating a Social Security account and examining your earnings history for accuracy will also help reduce the chances of fraudsters claiming your social security benefits. Creating that SSA login will help ensure that your account remains in your control - and not claimed by anyone who isn't actually you!
It’s also a good idea to double check your earnings history to make sure SSA is giving you credit for all the years you’ve worked (and therefore paid into the SSA system through FICA taxes). While rare, mistakes in the earnings records do happen. The sooner you alert the government to the problem, the better.
Will Social Security be around when I retire? 🙀
This is of course the million dollar question. Since I don’t have a crystal ball, I can’t tell you for sure. It's true that Social Security is unfortunately under-funded. In the not-too-distant future, the FICA taxes which fund Social Security will have to be increased, or benefit payouts reduced - or potentially both.
There’s no way to know for sure what will happen, but it seems pretty unlikely (though not impossible) that Social Security retirement benefits will entirely disappear. You may not want to count on receiving 100% of the monthly benefits you SSA statement estimates you’ll eligible for, but you’re likely to receive something.
Questions about how to think this through? Hit reply, let me know what’s on your mind and I’ll be happy to help!
S-Corp Election reduces your Social Security benefits 📉
Have you made the S-Corp tax election to save money on taxes? The S-Corp election reduces the FICA taxes you pay. And because it is those FICA taxes which fund Social Security, the amount of FICA tax paid also determines the level of benefits you will ultimately be eligible to receive. And since the S-Corp reduces your FICA tax paid, it will also reduce your Social Security benefits.
That doesn’t make the S-Corp election a bad idea. In fact, if you invest (a portion of) your FICA tax savings prudently, you’ll almost certainly end up with more income in retirement than Social Security would have provided. But that does mean you need to plan for saving a bit extra. 🤓
Watch for a future email where I explain exactly how to think this through and plan appropriately.
Can’t wait? No worries! Click reply and I’ll be happy to help.
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Ciao for now! 👋
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