Social Security Maximization

Social Security benefits, when combined with savings from a 401(k) and individual retirement account, can help you retire the way you want. Of course, not everyone earns the same amount from Uncle Sam.

Our Social Security Maximization report we can help you Maximize this benefit. Here are a few tips that may help.

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1. Understand How the Government Calculates Social Security

Many Americans assume that Social Security benefit amounts are based on your entire working career. In reality, your payments are based on your earnings from the 35 highest income years. If you have not worked for 35 years, every year you didn’t work will reduce your benefits. Want to avoid those zeros? Think about working a few extra years to raise your lifetime income average. In addition to helping fill your savings account, this should boost your Social Security benefit.

2. Know Your Full Retirement Age

Income is not the only factor that determines your Social Security benefit. Age is another big one. Normal or full retirement age is the age at which you can claim the full Social Security retirement benefit you’re eligible for. The Social Security Administration determines your full retirement age based on the year you were born. For most people, the magic number falls somewhere between 65 and 67. When you know your full retirement age, you can make a better-informed decision about when to start claiming Social Security.

3. Get the Timing Right

While you can start collecting Social Security payments at age 62, you would only receive your 75% of the amount you’re eligible for. You have to wait until you reach full retirement age to receive the full Social Security benefit you’re eligible to receive.

This technicality works the other way, too. In fact, you can continue to increase your benefit amount by delaying benefits beyond your full retirement age. If you wait until age 70 to start taking Social Security, you will receive 132% of your regular benefit amount.

Already started collecting and regretting it? No need to panic. Social Security beneficiaries between full retirement age and age 70 can voluntarily suspend payments to maximize earnings down the road. If you started collecting within the last 12 months, you can even withdraw your claim by repaying the benefits you have already received.

4. Be Tactical With Spousal Benefits 

Getting married may add a wrinkle to your Social Security strategy. Spouses (and ex-spouses) that were married for at least 10 years are eligible to claim not only their own benefits, but spousal benefits too. And that’s no small matter. Claiming spousal benefits means reaping 50% of your current or former partner’s annual payout.

To make the most of these payments, first determine which spouse will earn a larger benefit. The lower-earning spouse can start claiming Social Security at an earlier age, while the higher-earning spouse’s benefit amount continues to grow. Once the higher-earning spouse reaches 70, the couple can switch to filing against that person’s earnings history. (If born by 1-1-54 or earlier)

5. Read Your Social Security Statements

Every year, the Social Security Administration mails personalized Social Security statements to retirees and those approaching retirement age. Though it may be tempting to toss these papers out if retirement still feels far away, this information can help you plan for your future. The statement includes:

• Your estimated monthly retirement benefit
• How much your child or spouse could receive in benefits if you pass away before retirement
• The amount of spousal benefit your spouse would be entitled to at retirement
• Your yearly earnings record