Stretching Social Security Benefits to the Max

For anyone who’s interested in maximizing their social security benefits, there are a few key things that you want to keep in mind. Because we know Social Security may affect your retirement income, you really have to plan ahead. For starters, while some people look at Social Security as their nest egg, it’s really not. You have to consider ways to optimize your Social Security package so that you get the most retirement income.

1. Don’t rely on Social Security as your only retirement income: That’s a mistake that a lot of people make. They put all their faith in Social Security and then they find they can’t cover their basic expenses, much less unexpected ones like their medical bills.

2. Use your spouse’s benefits first: Some people think that when they reach age 66 they should take their Social Security benefits. You may not want to do that. You might want to tap into your spouse’s Social Security. While you are eligible for your own, you may want to apply for it and then suspend it. That way you can keep the eligibility open and receive the maximum benefit at age 70.

3. Tap into spousal benefits (Even if they’re deceased or you divorced): If your spouse is deceased, you can take what’s called survivor’s benefits. You can also tap into the Social Security benefits of a person who you were previously married to. This applies to someone who may be disabled. Social Security rules stipulate if you are a widow or widower, you can receive the full benefits that are available to you as early as age 60.

If you’re disabled: If, on the other hand, you are the one who is disabled and the disability started prior to or within 7 years of your spouse’s death, you can start receiving benefits as early as 50 years of age.

If their child is disabled: You can also receive benefits another way. You can receive Social Security benefits if you had a spouse that passed away and you were taking care of their child and the child is under the age of 16 or is disabled.

4. Don’t apply for consecutive benefits: If you have a retirement benefit, as well as a surviving benefit from your spouse, you should take the surviving benefit and save your retirement benefit until age 70.

 

5. Let your Social Security gain interest: Social Security benefits increase about 8% for every year that you do not take the money out. That’s until your full retirement age which is 70. That’s an additional 76% increase to your projected payment.

This is where you need a good strategy: If you are single, you may want to sustain yourself on other income so you can add the 8% interest each year. If you are a married couple, you may want to consider tapping into the Social Security account of the spouse who makes less money. Then let the account with more money increase in interest until that person reaches the age of 70.

6. Contribute more money to Social Security: The longer you work, the more you are able to contribute to Social Security. When you take money out of Social Security early and you don’t wait until age 70, this reduces the amount of money that you can receive. For example, if you were to take benefits today, and you are younger than 70, Social Security is going to take $1 from every $2 that you made over $15,720. If you wait until you’re 70, you’ll get all of that money back.

7. Strategize: As you factor in the different areas where you can maximize your Social Security benefits, this can help you to get the most out of your retirement income. You want to remember that planning for your retirement is about strategy. You want the maximum benefits from Social Security in addition to your IRA, your 401(k), and any other supplemental income.

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Ultimately, with Social Security, you want to contribute as much as you can to your plan by working. This will increase your benefits to the max when you reach age 70. You also want to diversify your portfolio, (IRA, stocks, annuities) and tap into all available spousal assistance, (survivor’s benefits), that way you can have the maximum retirement income so you can enjoy your golden years – You’ve earned it!



           

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