Social Security. The details are a shroud of mystery for many as they look toward retirement. But this is a dangerous road, for if you don’t form a strong strategy for when and how you’ll receive it, you could be leaving a considerable amount of money on the table.
Just a few moments of diligence on your part can help you decipher how to raise your Social Security benefit in order to receive the optimal amount of guaranteed income in your 60s, 70s, and beyond. In spite of this fact, however, recent studies show only a little more than 50% of retirees estimated the amount of their Social Security benefits prior to the age they planned to retire.
Following are two tips to help you avoid becoming part of that statistic. The key with both is to act sooner rather than later.
1. Calculate your retirement figure early
This can help you decide how long you may want to keep working and the amount you’ll need to save, as well as the various methods to invest your assets.
Visit the Social Security Administration website and use its retirement calculator for an estimate of what your monthly check might hypothetically be at different ages of retirement. That number is based on the total of your taxed earnings in the 35 highest-paid years of your career. You may be surprised at how much the numbers climb if you can wait a few years past retirement to start collecting your benefits. Remember, these estimates are based on current laws, however, which could change by the time your retirement rolls around.
2. If you’re married, talk to a financial professional about ways to help you and your spouse maximize your benefits.
He or she can help you come up with the best claiming strategy that is customized to your specific situation. As a general rule, in order to receive the highest benefits, the spouse with the greater salary should try to delay claiming his or her own benefits until age 70. Depending on your age and difference in income with your spouse, however, one of you may still be able to collect spousal benefits, while the higher earner holds off. This strategy raises the benefits of the spouse with the greater salary, and well as the benefits of the lower-earning spouse’s survivor benefits if he or she lives longer.
Bottom line: Hopefully you now realize now how important it is to create a proper Social Security collection strategy that is in line with your particular financial situation. Set up a time to work together with your spouse and/or a financial professional so you can get the most out of Social Security, which could help you live life to the fullest during your golden years.