Here's How to Get an Extra 24% Out of Social Security

This article was originally published here

Don’t accept less when you might boost your benefit checks and create a more financially secure future.

The Social Security system is not designed to replace private savings, pension plans, and insurance protection. The individual’s own effort, planning, and prudence will provide him with a higher quality of life upon retirement. The system emphasizes thrift and self-reliance while preventing destitution in our national life. 

Contrary to popular belief, Social Security is not a giveaway. It’s a system that working individuals contribute to throughout their careers in exchange for some needed assistance later in life.

Social Security, which provides, on average, approximately 40% of your pre-retirement income, is likewise unlikely to support you. Nevertheless, it’s worthwhile attempting to maximize your benefits, and there are specific methods to do so, so here’s how you may gain an extra 24 percent (or more!) from the program.

The fundamentals of Social Security

Several strategies can boost your Social Security payments, and we’ll focus on one of the most effective here. To set the scenario, everyone has a full retirement age when we can begin receiving the full benefits to which we’re entitled based on our earnings history. For the majority, the full retirement age is 66, 67, or somewhere between those ages.

However, we can begin receiving benefits as early as 62 and as late as 70 – and when we start has a significant influence on the amount of our checks.

How to get an additional 24%– or more

Each year that you postpone starting to receive your benefits after reaching full retirement age, up to 70, your checks will rise by roughly 8%. Delaying from 67 to 70 will increase your benefits by around 24%, enough to transform a $2,000 payment into a $2,480 check and increase yearly benefits from $24,000 to over $30,000. Meanwhile, starting to collect your checks early will diminish them.

The table shows how some people may be able to increase their benefits by 24% or even 32%.

Think it through

Delaying may appear to be a no-brainer option, but think about the big picture:

If you start collecting later, you’ll get fewer checks overall. But conversely, those who begin early will receive many more checks.

When you start may not matter much for people who have average-length lives, except for your spouse, since the two of you could optimize benefits through a coordinated Social Security plan.

Many individuals just can’t wait until they’re 70 because they need the money now, whether due to a job loss, a health setback, needing to care for a loved one or a lack of savings. Those in bad health may benefit from starting sooner as well.

Delaying your full retirement, if possible, might pay off in ways other than increasing your Social Security payment. You’d be able to save and invest for retirement for a few more years, for example, and your nest egg will have more time to develop. But, of course, it will also have to support you for fewer years.

Delaying Social Security can be accomplished by withdrawing more from other retirement funds, such as IRAs or 401(k)s until the Social Security income stream begins.

Everyone’s situation and decision-making process will be at least slightly different. Therefore, spend some time learning more about Social Security so you can make informed decisions and get the most out of the program.

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Bio:
M. Dutton and Associates is a full-service financial firm. We have been in business for over 30 years serving our community. Through comprehensive objective driven planning, we provide you with the research, analysis, and available options needed to guide you in implementing a sound plan for your retirement. We are committed to helping you achieve your goals. Visit us at MarvinDutton.com . Tel. 212-951-7376: email: [email protected].