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RETIREMENT PLAN INVESTOR

Use your plan ID (available on your account statement) to determine which employer-sponsored retirement plan website to use:

IF YOUR PLAN ID BEGINS WITH IRK, BRK, 1, 2 OR 754

Visit americanfunds.com/retire

IF YOUR PLAN ID BEGINS WITH 34 OR 135

Visit myretirement.americanfunds.com

How does Social Security fit into my retirement?

Make Social Security work for you

You’ve paid into Social Security from your very first paycheck. As you get closer to retirement, figure out the best strategy for how and when to start taking benefits to receive more dollars and owe less tax.

Get a ballpark estimate
Social Security is income you should be able to depend on, but it’s just one slice of your retirement savings pie. Your benefits are based on earnings during your working years, and the average monthly payment is about $1,500 per month. Whether that sounds generous or paltry, it’s smart to think about Social Security as a way to pad your other retirement income.

Consider waiting
Typically, you can start receiving Social Security benefits between ages 62 and 70. If you want to claim the maximum benefit, you have to reach full retirement age (67 for those born after 1960). If you start drawing benefits as early as you can, your monthly amount will be reduced. Wait until age 70, and your monthly benefit will increase. Figure out how your timing (and your partner’s) can impact income. It may pay to be patient.

Collect strategically
Talk to your financial professional about the best way to begin drawing Social Security. Have you maxed out contributions to your own IRA or 401(k)? You could structure your current investments to provide a relatively stable income while you let your Social Security benefits grow.

Reduce your tax bill
You may be surprised that Social Security can be taxable income. Depending on where you live and your other sources of income, you may have to pay taxes on your benefits. Here are three ways to help you keep more of your Social Security dollars.

     

  1. Wait to claim benefits until you’ve stopped working. If you’re still getting a paycheck while drawing Social Security, you’re likely to exceed the income threshold at which your benefits become taxable.
  2.  

  3. Consider pension income. If you are eligible for pension benefits beginning at age 65, Social Security could be tax-free until your pension income begins. So you may want to start claiming those payments earlier.
  4.  

  5. Get a draw-down plan. If you have saved in both Traditional and Roth IRAs, you may be able to manage withdrawals to reduce income taxes. Roth contributions are made after-tax, so distributions don’t count as taxable income. Talk to a financial professional to set up a tax-efficient withdrawal plan.

     

 

About us

Learn about Capital Group and find resources to get you started.

Who we are

One of the world's largest investment managers, we've helped investors succeed by remaining true to our values and approach. We believe in a distinctive way of managing money, an emphasis on research, a long-term view and the recognition of the power of relationships.

What we do

Capital Group offers a variety of investment options to help you pursue your objectives — including American Funds, one of the largest mutual fund families in the U.S.

Where to find our funds

Your financial professional can tell you more about American Funds. Or, you can purchase our funds yourself through an online broker.

Important questions to consider

Whether you are collaborating with a financial professional or figuring out your own finances, these questions can help get you started.

  • How long should I wait before taking Social Security?

  • How should I manage withdrawals from other accounts to minimize my tax burden?

  • What percentage of my retirement income will come from Social Security?

The value of guidance

A financial professional can work with you to define your goals and create a plan to help make them a reality. From establishing a budget to selecting investments to riding out market shifts, an advisor can help you make decisions based on your specific situation.

Looking for a financial professional?

Our locator tool can help you find professionals in your area.

Check the background of these investment professionals on FINRA’s BrokerCheck.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.

Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.

Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. This information is intended to highlight issues and should not be considered advice, an endorsement or a recommendation.

All Capital Group trademarks mentioned are owned by The Capital Group Companies, Inc., an affiliated company or fund. All other company and product names mentioned are the property of their respective companies.

Use of this website is intended for U.S. residents only.

American Funds Distributors, Inc., member FINRA.

This content, developed by Capital Group, home of American Funds, should not be used as a primary basis for investment decisions and is not intended to serve as impartial investment or fiduciary advice.