With the recent rash of layoffs and unemployment, I have talked with many clients who have decided to apply for their social security benefits as early as possible.  Many our concerned about our government’s current budget crunch and the ability for the benefits to continue into the future.  Some are self-employed or working as consultants for former employers.  The whole conversation usually revolves around how they can make sure their other sources of income do not limit their maximum social security benefits.

For 2009, under full retirement age recipients can earn up to $14,160 in a year without limiting their social security benefits (full details are available at www.ssa.gov).  With self-employment, there are many opportunities to structure income and time the income to make sure that earnings fall under this limit and benefits are maximized.  Here are a few ideas that we discuss in this situation:

1. Is your spouse collecting social security benefits?  If not, there may be an opportunity to employ your spouse and shift income.
2. Is there an opportunity to increase pre-tax retirement contributions?
3. Can a medical reimbursement plan be used to lower taxable income?
4. Is a C-corporation structure able to reduce personal income?

This has become a popular subject and we offer a customized solution to maximize your social security benefits and minimize your tax effects.  Call us today to schedule your strategy and planning meeting.