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Determining When to Start Social Security Benefits
Determining When to Start Social Security Benefits
  • Jan 23, 2013
  • Written by Gail Buckner, CFP®, CRPS, AIF®, Financial Planning Spokesperson

The size of your Social Security benefit is based upon the amount you paid into the system over your work life.  This is a combination of two factors: the size of your paychecks (which, in turn, determine how much you contributed) and the Social Security- or OASDI-tax rate- in effect at the time.1 


There’s a limit to the amount of income you pay Social Security tax on.  It’s adjusted each year for inflation.  In 2012, payroll tax applies up to a maximum of $110,100.  


Social Security tax is only assessed on earned income, that is, income from a job.  You don’t pay it on investment income such as capital gains, interest or dividends.


To determine the amount of your benefit, Social Security looks at your 35 highest years of earned income and adjusts this for inflation.  If you don’t have 35 years of income, zeroes are used.  (This is a major reason women receive less Social Security than men: the years they were out of the paid workforce for family responsibilities reduce their average lifetime earnings.)


Determining When to Start Social Security Benefits can be a challenge which is why we’ve developed resources to help you walk clients through common, but surprisingly complex situations.


We have additional resources for working with individuals in our Resource Center.


Social Security may not be the only conversation you’re having with you clients. Our Sales Programs have useful resources to complement the conversations you’re already having.


  1. OASDI stands for “Old Age & Survivors Disability Insurance.”  As it suggests, the “Old Age” part is what pays you income when you retire; the “Disability” part pays when you are younger, but unable to work for physical or mental reasons.  There is an additional “tax,” or premium, to cover Medicare.


Gail Buckner Gail Buckner, CFP® Professional, CRPS, AIF®, Financial Planning Spokesperson


Gail Buckner is the financial planning spokesperson for Franklin Templeton Investments. She is also an instructor for the Franklin Templeton Academy, Franklin Templeton's global financial advisor training program.


Ms. Buckner's background includes 30 years in television journalism and two decades speaking on financial and securities industry topics. She has extensive experience working directly with financial advisors and shareholders, providing expertise on a wide range of topics including Retirement Planning, IRAs, Social Security, Estate Planning, 529 College Savings Plans, and Women and Money.


Ms. Buckner has received two Emmy Nominations for her work in broadcasting, which includes hosting “Fox on Money” on the Fox News Channel and anchoring CNBC's “This Morning's Business” and “World Business.” She currently writes the personal finance column, “Your Money Matters,” at, which is read by more than 100,000 people each week.


Ms. Buckner is a CERTIFIED FINANCIAL PLANNER, a Chartered Retirement Plans Specialist, an ACCREDITED INVESTMENT FIDUCIARY, and holds NASD Series 7 and 63 licenses. She earned a B.A. in English from the University of California at Santa Barbara and an M.S. in financial planning from the College of Financial Planning.



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