Social Security: Maximize your retirement benefits

By: on 2013-01-09
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The Social Security program was started 76 years ago and today is one of the largest welfare systems in the world. It also serves as the only source of income for millions of Americans all over the country. Although Social Security benefits will never measure up to your current monthly income and employer benefits, it should nonetheless be considered as a significant part of anybody’s retirement plans.

401(k)s and Roth IRA funds are of course the leading choices for people looking to build up their retirement savings but Social Security provides as steady trickle of money which would be enough to take care of your everyday needs. It would also stop you from eating into and depleting your other savings. Although Social Security has a definite and steady benefit line, how do you maximize the benefits you can derive out of it?

Postpone your Social Security claim

You might plan on retiring well below the age of 60 and start living your dreams with whatever you have saved up but you will of course be eating into your savings which might get depleted while you are still alive.

In order to prevent such a thing from happening, you should consider delaying your retirement until the age of 70, you will be receiving 76 percent greater benefits than you would have earned from claiming SS benefits at 62. If you do not wish to delay claiming your benefits by such a length of time, you could consider claiming it at 66 which would translate into a 32 percent greater benefit.

Postpone your retirement

The more number of years you work, the more you earn and the more you add to your Social Security benefits fund. This is common knowledge but if you think about it, there is a triple advantage to retiring at 66. One, the longer you work the greater will be your SS benefits. Two, as you continue working, you will not need to dig into your savings and instead run on your monthly pay checks. Three, all your employer sponsored benefit plans like a 401(k) fund will keep growing the longer you work.

So in conclusion, just 4 years of working past the age of 62 will not only raise your general SS benefits by 32 percent, it will also build up your savings as well as your basic Social Security payout.

Claim spousal benefits

Again, your Social Security benefits grow in more ways than one in case you are married. Couples are able to claim their full benefits or 50 percent of the higher earner’s benefits (whichever is greater) past their full retirement age. Benefits will be based on individual work records. Claiming benefits before full retirement age would of course reduce the payout significantly.

If both of you are earning members, you can opt to claim spousal benefits and then switch over to claiming individual benefits after the age of 70 which means that SS benefits would be at their potential maximum. The idea is an excellent point to maximize your SS benefits by delaying your general individual claim and increasing your benefits by at least 76 percent.

If you had been married for 10 years at least, you can easily lay a claim on a portion of your ex-spouse’s Social Security benefits which will of course be based on your ex-spouses individual work record. You also have the option of claiming your deceased spouse’s retirement benefits (which will be equal to either the deceased spouse’s full retirement benefits or the higher earner’s benefits, whichever is greater).

Last Updated on: Wed, 9 Jan 2013

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