Social Security – What is the Five Year Rule

social security 5 year rule

The Social Security Administration recently extended the Social Security 5 year rule. In prior years the five year rule did not apply to most people. This rule was implemented in order to keep people from receiving benefits at an older age. The five year rule applies to anyone who is receiving social security benefits. The maximum benefit year for this social security program is 55. Any person who has reached this age and who has not retired will be forced to go back to work.

Five Year Rule of Social Security

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The Social Security Administration deems that any person over the age of twenty-five should have a retirement plan in place. Anyone over this age should also be receiving some type of coverage. Many parents choose to pay for their children’s college or university education using their life insurance policy. By continuing to pay for your child’s education you can also receive Social Security benefits.

Many people are currently receiving retirement pay that is higher than they need to. Some people are waiting until they are well into their retirement years to begin taking advantage of Social Security benefits. Retirees should always plan early for their retirement. By doing so, you can have a larger benefit amount to work with once you reach retirement age. It can take years to build enough money to retire comfortably, so be prepared ahead of time.

Retired individuals can continue to receive benefits if they employ a particular financial advisor. Many financial firms offer their clients financial planning services. These advisors can help their clients create a financial strategy for retirement. They can help individuals determine what types of investments they can use for their retirement. The financial adviser can also advise a person on how to reduce the costs of living during retirement.

Being able to receive Social Security benefits is something that every American citizen should consider. If you are retired and are receiving benefits then you should consult with a financial advisor. If you are not retired, but are receiving benefits, there are many other sources of additional income that you can turn to once you begin receiving Social Security. There are also many tax saving strategies that you can pursue.

One option is to receive payments sooner. By taking the full benefit amount now, you will be able to receive a larger retirement payout in your later years. Another option is to delay retiring. By waiting to receive your retirement pension at a younger age, you will receive larger monthly benefits. If you are currently receiving benefits and are not yet eligible for the full benefit amount, you may want to consider waiting. If you wait past the normal retirement age, you may face losing those payments as well.

If you are working right now and are not eligible for Social Security benefits, do not despair. You can defer receiving the benefit payments until after five years of service. Under the Social Security Act, people who begin receiving Social Security right before they reach the retirement age must remain in the workforce for five more years to be eligible for the full benefit. Usually this five years requirement is met by working in a job that continuously provides you with at least twenty hours of work per week for the first three years. However, you do have the option of leaving early, but that choice is up to you.

End Note

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When choosing which years to leave, remember that it is better to be early than late. Your five year rule of thumb is a good guideline. On the other hand, you do not want to over-stretch yourself so that you don’t have any benefits left when the five year term has run out. Remember, if you retire at any age, you will receive your benefits. So, the important thing is to choose the correct years to take advantage of the five year rule.

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