Ways You Can Maximize Your Social Security Benefits
It’s Not Always Easy but You Can Maximize Your Social Security Benefits with These Tips
Social Security benefits are a cornerstone for many retirees’ income. For many Americans over 67, it is the only income they receive. Whether you are living off of this monthly payment entirely or augmenting it there are several ways to maximize your Social Security benefits. You can implement some of these tips after you have retired. Others will have to be kept in mind as you work towards your retirement.
Strategies and Tips to Maximize Your Social Security Benefits
Put Off Collecting Social Security Until Age 70
It’s a long road to retirement and many people can’t wait to get there. In fact, 40% of men and women begin collecting Social Security at the minimum age of 62. Others begin taking their social Security benefits when they reach full retirement age. This is 66 for anyone born before 1960 and 67 for everyone born after that date. However, by waiting until age 70 you can take advantage of delayed retirement credits. These credits will maximize your Social Security benefits and increase them by 8% a year, plus inflation. These credits are available for every year you wait after your full retirement age until age 70. After age 70 there are no more credits to accrue. So, by waiting three to four years you could receive 24%-32% more in Social Security benefits than if you retired at age 66 or 67.
Work and Pay into Social Security for at Least 35 Years
To calculate your Social Security benefits the SSA takes the earnings from 35 years of your work history and uses them to determine your Average Indexed Monthly Earnings. This average determines how much money you will receive in monthly benefits. If you have not worked, or you haven’t paid into Social Security during your working years then the SSA will have to average in zeros. Having zeros in this average will significantly reduce the amount of Social Security benefits that you will receive.
Earn Higher Wages to Receive Higher Benefit Payments
Your highest-earning 35 years is used to determine your monthly benefit payments. So, the more you’ve earned, the higher those payments will be. In order to maximize your Social Security benefits, you want to do everything you can to boost your earning potential. Ask for a raise, pursue promotions, or start a side business. There is a cap to the yearly dollar amount that the SSA will use when calculating your Average Indexed Monthly Earnings. The limit is $128,700 per year. Any yearly amount over this limit is reduced to this number. So, if you make $250,000 a year for ten years the SSA will use $128,700 for each of those years when calculating your Social Security benefit payments.
Claim Anyone Living in Your House Under the Age of 19 as a Dependent
Just like with taxes, if you have someone under the age of 19 living in your home you can claim them as a dependent on your Social Security application. Each person can be worth up to one-half of your full retirement benefits to a certain annual limit. However, you can’t use this method if that person is already being claimed on another person’s taxes. That is considered Social Security fraud.
Minimize Your Taxable Income
If you are a single retiree at full retirement age, your Social Security benefits are subject to being taxed up to 50% if your total adjusted income is more than $25,000 a year. If you make more than $34,000 a year, you can have up to 85% of your Social Security benefits taxed. Couples filing jointly can earn up to $32,000 a year before their Social Security benefits are taxed up to 50%. If you and your spouse earn more than $44,000 a year, then your Social Security benefits can be taxed up to 85%. These totals include ½ of your Social Security benefits plus your earned income.
Neddenriep Financial Can Help Maximize Your Social Security Benefits
There are other ways to maximize your Social Security benefits. They include taking advantage of spousal payments, survivor’s benefits, or not getting remarried until after 60. If you want to take advantage of these tips, it is a good idea to consult with a financial money manager. Neddenriep Financial has been helping retirees in Minden, NV and the Carson Valley area for years. Our financial experts sit down with you face to face and offer advice on some of the ways you can make the most of your retirement and Social Security benefits. We may be the architects of your retirement, but you are the driving force behind it. We are also available for investment planning, wealth management, and tax planning.
Maximize Your Social Security Benefits With Neddenriep Financial
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