Social security seems simple. Most people think that they need to pay into their social security taxes the course of their career before the benefits start streaming in once they retire. However, it isn’t as simple as that. Figuring out when to apply for benefits and finding those benefits you are eligible for typically involves navigating through 2700+ rules that govern this program’s payouts.
With the following strategies, you should be in a position to know how to maximize your social security benefits. Read on to learn more:
How To Maximize Your Social Security Benefits
1. Patience Pays (Literally and Figuratively)
Social security retirement benefits start being paid out when you hit 62. However, what most people don’t know is that waiting for a couple of years more will enable them get paid more. Simply by being patient until you get to the age of 70 will get your payments increased by 76%.
This is because, at this more-advanced age, you will start earning delayed retirement credits, which equal 8% per year (plus inflation for every year you decided to delay before claiming your benefits). Still, you should not continue waiting once you are 70+ because after that the delayed social security retirement credits will stop accruing. This is one way how to maximize your social security benefits.
2. Leverage on Payments
Find out whether you are eligible for other extra retirement benefits. Widowed, divorced and married seniors may also claim ‘survivo’ or ‘spousal’ benefits based on the work records maintained by their exes and spouses, whether they are living or deceased.
However, there are assumptions to keep in mind in this instance. First, you must have been married for a specific period of time (the minimums vary). Second, you should not remarry too soon and, third, you need to be strategic about when you make an application for the extra retirement benefits. This is another strategy on how to maximize your social security benefits.
If you are married, you or your spouse may claim the full spousal benefit. This typically equals half your partner’s social security retirement benefits. For divorced parties, your ex and you may still claim spousal benefits based on the other partner’s benefits. The only caveat is that you must have been married for a minimum of 10 years before splitting.
Widowed seniors, on the other hand, may receive as much as 100 percent of their deceased partner’s full retirement benefits. The amount will depend on when you decide to take the benefits.
4. Be Strategic
Never file for two types of retirement benefits at the same time. In case you are eligible for your retirement benefits, for instance, and survivor benefits, you might end up losing out on one of the above if you make your applications at the same time. More often than not, you will only be able to collect the larger benefit. Instead, consider applying for the lesser benefits, before making a claim for the larger one – this is a way how to maximize your social security benefits.
5. File and Suspend For Your Partner
To ensure that your better half gets spousal social security benefits, you need to file for your retirement benefits first. However, your benefits can still keep growing until you attain the age of 70. To achieve this, it would be wiser to file at you retirement age then suspend collecting the benefits until 70. This os another way how to maximize your social security benefits.
Following are a few helpful Social Security links:
In conclusion, the above tips and tricks will show you how to maximize your social security benefits. As a senior, you certainly do not want to have financial problems after working your entire life for the security that comes with retirement.
The above information is not intended to substitute specific individualized tax, investment or legal planning advice. Where you need specific advice, please consider consulting with a professionally qualified and certified investment manager, financial planner, CPA or tax advisor.