Social Security

When to start taking Social Security.

Social Security payment amounts are determined by how much you earn while working and when you elect to start receiving payments. Married individuals are eligible for spousal and survivor's payments. Triggering Social Security benefits is another personal decision which may be based on short term income needs and time horizon. The longer you can wait to begin Social Security, the higher the benefit you will receive.
As per US News, Social Security monthly benefits are reduced if you start payments before your full retirement age, which is 66 for most baby boomers and 67 for everyone born in 1960 or later. Workers who sign up at age 62 will get 25% smaller monthly payments if their full retirement age is 66 and a 30% benefit reduction if their full retirement age is 67.

Non-qualified savings

Using savings to supplement retirement income.

If you were able to save money in a non-qualified account (meaning any type of post-tax account outside of a retirement plan), you can consider supplementing retirement income with these savings. As we discussed before, traditional retirement account distributions are subject to ordinary income taxes. Money saved in non-qualified accounts on the other hand, are potentially subject to long-term capital gains if you held the asset(s) for more than a year.

Consider employing the 4% rule to this money as you did your traditional retirement assets.

Speak to your CPA about the tax implications of using your non-qualified savings versus your qualified retirement savings and which source of funds are better given your personal tax situation.

Julian Schubach is Vice President, Wealth Management at ODI Financial. Julian serves a broad range of creative clients including artists, entertainers, and digital influencers, providing comprehensive financial education, planning and wealth management. Julian's clients include multi-platinum selling musicians and producers, award winning actors, directors and choreographers and best-selling writers. In addition to his private client work, Julian provides financial education and literacy seminars to arts grant recipients and clients of arts non-profit organizations. Julian has been named a 'Top-100 Financial Advisor' by Investopedia and in 2018, Julian was a contributing writer for New York Foundation for the Arts book, 'The Profitable Artist,' penning three chapters focusing on personal finance for creatives.

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Income planning considerations for Americans approaching retirement

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