Social security offers retirees and others a secure and fixed income that provides helpful financial support for their golden years. Since such an opportunity allows people to get reliable income for the rest of their lives, many look for ways to maximize their social security benefits.
Here's reviewing the best ways to maximize your social security benefits while you still can.
4 Tips to Maximize Your Social Security Benefits
Even if you don't intend to rely on Social Security as a primary source of income, you have a right to protect your Social Security number and receive it for the money you earned. If you're still in the active workforce, you want to know how the Social Security Administration is computing your future benefits. Here are the top decisions you can make now that affect how much you eventually receive when retirement calls.
1. Work Longer
The longer you work, the more money Social Security pays you, up to your best 35 years of income. Suppose you had your best earnings over 30 years but took time out to cater to kids or a loved one, Social Security averages out your 30 years of earnings over 35 years.
2. Earn More
If you pay more into the Social Security system from your earnings, your final package increases. In any case, the more you earn during your working years, the higher your average earnings. However, Social Security computes your average earnings up to $168,600, as of 2024.
3. Delay Taking Benefits
If you wait longer before claiming your benefits up to age 70 - you'll get to claim a higher monthly payment later. While you could begin drawing your Social Security Benefits from age 62, it could rob you of reaping the maximum obtainable from your working years. Of course, that'd only be rational if you seriously need the earnings and think you have limited time on the planet.
Each year you delay, up to age 70, your benefit increases by 8%. For instance, waiting till age 70 while your full retirement age is 66, you get to compound up to four years of 8% raises which eventually translates to over 30% than it would have been at full retirement age of 66.
That said, if someone dies before recouping their Social Security benefits, a surviving spouse can reclaim the benefits.
4. Work with a Specialized Financial Advisor
There are hundreds of possible ways to claim your benefit. Expert reports claim that many people in the United States fail to leverage the optimum claiming strategy to provide them with the largest sum over their life expectancy.
Here's why you want to work with a financial advisor who consults for Social Security benefits, especially if you think you might have a special situation.
Conclusion
The more you work longer, earn more, and delay taking benefits up to age 70, the higher your Social Security benefits. Don't hesitate to consult a specialized financial advisor if you think you might have a similar situation or are keen about making optimal financial decisions to maximize your monthly earnings when you retire.