Although you won’t become eligible for Social Security until your 60s, there’s a lot you can do to prepare before then. Here’s a rundown of steps you can take during each decade of your life to start planning for Social Security:

Start Social Security planning early

In your 20s: If you’re like a lot of people, you’re embarking on a career. At this point, there’s no guarantee that Social Security will be around in its current form when you’re ready to retire. The smart move is to build up retirement savings on your own. For instance, you could be participating in a 401(k) or other qualified plan at work. If done, Social Security benefits will be a pleasant surprise when you retire.

In your 30s: As you continue making retirement contributions, begin checking on your Social Security wage history. Go to the Social Security Administration (SSA) website to set up and review your account. Eventually, benefits will be based on your work history. Make sure your wages are reported correctly and correct any errors. At the same time, increase retirement plan contributions.

In your 40s: Typically, your earnings increase significantly. Be aware of the key rules relating to Social Security benefits. For example, realize that the SSA uses your average earnings from the 35 highest-earning years to calculate your retirement payments. So keep track of this and continue to replace lower-income years with higher-income years. This will result in higher benefit checks when you retire.

Thoughts near retirement

In your 50s: Circle a target date for retirement. While not etched in stone, having a target date allows you to assess whether you’ll be able to maintain your current lifestyle given your expected income and expenses. This exercise is more important if you’re considering early retirement. Continue to check the income being reported to the SSA and create a forecast for the future. If you wait until your 60s to begin this planning process, it may be too late to save enough to meet your retirement goals.

In your 60s: Decide whether you want to begin taking benefits at age 62 (the earliest age), age 67 (the current full retirement age), or somewhere in between. The longer you wait, the greater your monthly benefits will be, but you’ll be giving up use of the money in the meantime. Factor in aspects like your health, plan payouts, required minimum distributions, and other earnings. Finally, remember that up to 85% of Social Security benefits are taxable at the federal level, so it’s worth starting to plan now!

As always, please contact our RRBB advisors with any questions or concerns regarding your situation.