These steps can assist you in maximizing your retirement income.
Preparing to retire and begin collecting Social Security benefits can be an exciting time in your life, but it’s critical that you’re as prepared as possible. Social Security benefits can account for a sizable portion of your retirement income, so it’s important to maximize them.
It will be easier to maximize your retirement income if you take advantage of the three moves listed below before filing.
1. Double-check the amount of your benefit.
Even if you haven’t retired yet, you can look up your estimated benefit amount to see how much you’ll receive. Begin by registering for a mySocialSecurity account online. You’ll find your Social Security statements in your account, which will include your estimated benefit amount based on your actual earnings throughout your career.
Knowing how much of your income will come from Social Security is critical if you plan to retire soon. It will be easier to determine whether your savings are on track once you know roughly how much you will receive from Social Security.
2. Confirm that you understand how your age will affect your benefits.
You can apply for Social Security at any age after the age of 62, but the longer you wait (up to the age of 70), the more money you’ll receive each month. There is no right or wrong answer as to when you should file, as each age has advantages and disadvantages. However, it is critical to understand how your age affects your benefit amount.
When you check your estimated benefit amount online, it is based on the assumption that you will claim at your full retirement age (FRA), which is either 66, 67, or somewhere in between, depending on the year you were born. If you file before that age, your benefit amount will be reduced by up to 30% for the rest of your life. You will receive your full benefit amount plus a bonus of up to 32% per month if you wait until after your FRA.
3. Think about how your spouse fits into your strategy.
If you and your spouse are both eligible for Social Security, you should plan ahead of time when each of you will file a claim. Again, there is no right or wrong answer here, but taking into account how your spouse will affect your strategy can be a smart way to maximize your benefits.
For example, you could have one spouse file for benefits right away while the other waits. In that case, you’d have some extra income earlier in retirement while still benefiting from the larger checks you’d earn by deferring.
In addition, if one spouse dies, the surviving spouse may be entitled to the deceased partner’s full benefit amount in survivors benefits. In some cases, it may make sense for one person to postpone benefits so that if he or she dies, the surviving spouse can receive a higher monthly payment.
Social Security benefits can be very important in retirement, so make sure you’re doing everything you can to maximize them. When you have a solid plan in place, you can file for Social Security with confidence, knowing that you’ve done everything possible to prepare.