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What can I do to maximize my social security benefits? At what time can I start taking my social security benefits? Social security retirement planning is essential to ensure that your retirement years are spent comfortably. It is also an integral part of your retirement plan. Most people approaching or already in their 60s do not know where to go for help, and perhaps they begin claiming the social security benefits as soon as they become eligible. But is this the right decision?
The right social security timing can offer you numerous advantages, and although this might be the right time for some, it could also cost them thousands of dollars down the line. Therefore, you should consult a professional advisor for social security planning. Below are the reasons to incorporate social security planning into your retirement plans and how you could benefit by enlisting a professional advisor.
No matter how distant your retirement may seem, planning for this transition is crucial, and you should also incorporate social security considerations into your planning process. So, what should you know about social security retirement planning?
Social security is funded from three sources, with income taxes being the biggest funding source. This means that so long as people continue working and paying the taxes, there will be a reliable influx of funds to ensure the program continues running. Ensure you include your estimated social security and retirement income.
The improved living standards have led to a higher life expectancy. Therefore, the social Security Administration revised the retirement age upwards to 67 for anyone born in 1960 or later from 65. The more you wait after the eligibility age, the higher the monthly benefits. Therefore, consult with a retirement advisor to determine the right time to start taking the social security benefits, considering the impacts of taking the benefits at different ages on your retirement planning.
With social security benefits, your lifetime earnings are adjusted to cater to any variation in your wages. Your 35 highest-earning years is the basis used to calculate what you might receive.
Social security will remain around for the foreseeable future. It received more funds than it paid out to the beneficiaries for many years. However, with more and more people retiring, its $2.9 trillion reserves are being tapped. Between 2009-2019, the number of retirees enrolled for social security benefits increased from 33.5 million to 45.1 million.
Though the program still gets the funds, this increase in the number of beneficiaries might cause a decrease in the amount of payouts per beneficiary. It is estimated that the reserves might be depleted by 2035 at the current pace of enrollment. Therefore, it is best to work with a financial planner to find ways of supplementing social security retirement income.
Social security income entails your wages, earned income, or net income. If some money is withheld from your FICA or social security wages, they are also covered as social security income. Your investments or savings aren't social security income, annuities, pension payments, and dividends or interests. You might have to pay income tax but not social security taxes.
Are you wondering when to start taking social security? The minimum age of claiming social security benefits is 62 years. Those approaching 62 years and who need social security funds to support themselves can claim the funds. However, you might lose a considerable amount by requesting the benefits this early. If you have other means of supporting yourself, the best social security timing thing for you may be to delay claims until you attain the full retirement age or over that period. Those that claim the benefits after 70 years get 124% of their monthly benefits, while those claiming them at the minimum age of 62 see their benefits reduced by 30%. Delaying the time to make a claim is the best social security maximization method.
The answer to this depends on your lifestyle. Can the social security benefits cater to your current lifestyle? Currently, social security cannot and is highly unlikely to provide sufficient income to support your life and ensure you lead a comfortable life upon retirement. As discussed above, more and more retirees are enrolling for this program, meaning that there will probably be a decline in the amount of benefits they will be receiving in the future. Working with an experienced retirement advisor is essential to ensure that you factor social security, as well as other strategies, into your retirement plan.
Yes, spousal benefits are fully paid out to widowers or widows of eligible workers. This is mainly vital for families having children when the breadwinner dies. However, spousal benefits may be reduced to about half of the employee's primary insurance amount, based on the spouse's age at retirement. If the spouse claims the benefits before the full retirement age, they'll get reduced benefits. If the spouse cares for a qualifying child, the benefits won't be reduced.
Retirees may face monetary hardships when entering retirement. Fortunately, most of them are enrolling for social security benefits and enlisting the help of retirement and investment advisors to plan for their lives after retirement. Navigating and knowing when to claim social security benefits can be overwhelming. That is why it is best to enlist the services of a professional retirement or financial advisor to help you in this critical process. Contact Goodwin & Smith Financial Services for all your social security planning needs.