Pieces of the Retirement Puzzle—Social Security and Required Minimum Distributions

May 6, 2021 | Federal Employee Articles, Newsletter Articles

Social Security is one of the three primary sources of income in retirement. The benefit is based on your average 35 years of work history and weighted by the years you made the most income. You’re first eligible to start taking social security at age 62, and each year you defer your benefit the payment amount increases. If you turn on social security anytime between Age 62 and your Full Retirement Age (FRA), there’s a limitation on your earned income. If you start your benefit between 62 and FRA, and your income exceeds the annual earnings test, your benefit may be reduced. Depending on when you were born, your Full Retirement Age (FRA) is between 66 and 67. If you plan on working past your FRA, then your decision on when to start social security might be easy. If you wish to retire earlier though, there may be more decisions to weigh. 


The answer to this question is: there isn’t a one-size-fits-all answer that works for everyone. You should start taking Social Security when it is the right time for you.

Positives to Drawing Benefits Early at Age 62 

  • Draw benefits for the longest duration possible 
  • A dollar in hand today, might be worth more than two at some time in the future 
  • Able to take advantage of the annual cost of living adjustments  
  • Could take years to make up the income lost if you defer distributions past your full retirement age 
  • Could provide a needed income source, if you were forced to retire early 
  • If you have health concerns, it can make sense to start drawing your benefit early 

Positives to Drawing Benefits at Your Full Retirement Age 

  • No Annual Earnings Test, if you start your benefit past Full Retirement Age 
  • If you start social security at FRA or later, there’s no limitation on your earned income. 

When it comes to Social Security, you must be present to win. Talking to a financial planner can help you weigh the pros and cons of when to start drawing your benefit. 

The age you start drawing Social Security benefits is influenced by your financial situation, life circumstances, etc. Also, taking distributions from other retirement accounts doesn’t follow the same age structure as Social Security. There is a specific age when you need to take distributions from pre-tax retirement accounts though. If you don’t know much about Required Minimum Distributions or RMDs, it’s time to familiarize yourself with them. 


A Required Minimum Distribution (RMD) is a mandatory withdrawal from a retirement account that a retiree must take at age 72. Not taking these mandatory withdrawals could result in a penalty on the amount that was supposed to be withdrawn.

Because you cannot leave your retirement funds in your account indefinitely, there is a minimum amount that you must take. Keep in mind, you can withdraw more than the minimum required amount too. All withdrawals will be included in your taxable income—except for any accounts that can be received tax-free (such as qualified distributions from designated Roth accounts). 

In 2020, the CARES ACT suspended RMDs due to the pandemic, but they were reinstated in January 2021. 


If you have any questions regarding Social Security, Required Minimum Distributions, or when you should start drawing benefits – then it is time to take a closer look at your financial situation. Retirement may be closer than you think! Schedule an appointment today with Benchmark Financial Group by filling out the form online or calling David Raetz at 913-534-8256 to discuss your financial needs.

“Welcome Back RMDs. We’ve Missed You!” https://www.fedsmith.com/. 25 Mar. 2021.
“4 Good Reasons to Start Social Security Early.” https://www.fedsmith.com/. 20 Dec. 2020.

Retirement Readiness Checklist

Retirement...are you ready?

Download our retirement readiness checklist to see if you are on track for retirement, and get a list of documents you need to get the process rolling. Enter your name and email below and we'll send a copy directly to your inbox.

Success! Check your inbox for your Retirement Readiness Checklist download.