3 WAYS TO INCREASE YOUR SOCIAL SECURITY CHECKS IN RETIREMENT
Whether retirement is around the corner or years away, it is always smart to be forecasting the cost of retirement versus the income you will take in. Most Americans will have the ability to collect Social Security in retirement making important to discuss savvy ways to increase your monthly payouts.
Understanding Social Security Benefits In Retirement
For beginners (and non-beginners alike), diving into the intricacies of the Social Security system can be daunting! Determining payouts and earned benefits can be extremely difficult based on the administration’s complex payout formulas.
To start with the basics, if you are a United States citizen that has paid FICA taxes for at least 10 years, or you are married to someone who has, you will be able to collect Social Security benefits. In 2019, the average monthly Social Security individual payout was $1,450. Accordingly, the average Social Security payout for a couple in 2019 was $2,400 a month.
You may have noticed by now; the Social Security Administration doesn’t earn a gold star for their ability to explain how they calculate your benefits. The good news is, if you can latch on to a few key tips, you can take charge to increase your monthly benefits.
Don’t neglect your statements
In 2019 alone, the SSA will send out nearly 64 million checks. That’s right, their 60,000 employees will assist in getting beneficiaries over $1 trillion this year (2019). With so many people relying on the SSA, it is important to personally review every aspect of your future payout.
You can visually see exactly what benefits the SSA believes you are entitled to by obtaining copies of your Social Security statements. Each year, you should be requesting your statement from the SSA and reviewing its accuracy. The main items to review are your work and earnings history. Even if you do not review these yearly, at the very least, you must look over the statement before filing for your benefits.
The SSA rules, do not leave much room for correcting errors. If you file and there are inaccuracies in your work history or you’ve filed incorrectly, there is almost no chance that the error will be corrected or reversed.
By taking the time to review for accuracy, you are doing your part in making sure the government is giving you the portion of your benefits that you deserve. If you don’t do your homework, you may not realize that benefits are being missed.
Working years turn into dollars
The monthly dollar amount on your Social Security checks is partially based on what you earned in a 35-year period. If you have 45 years of work, the SSA will use the 35 years in which you averaged the highest earnings and base your benefits on that window of time. In the same way, if you have years that you did not work, those zero-earning years will heavily impact your overall earning average.
So, what happens if you were a homemaker with very little work history? Your spouse’s work history can work for both of you. Even if you are divorced (and not remarried) you are entitled to the benefits your spouse earned.
If you are still in your working years, keep that 35-year window in mind. Just one zero-earning year could impact your entire retirement payout. This holds to be especially true for women. If you plan to take a period off to raise children, consider where you are in that earning window and devise a plan to make up the time in those later years.
Time is money
They say time is money and this couldn’t be truer when it comes to Social Security payouts. The longer you delay claiming your Social Security benefits, the bigger those benefits will be.
This is a big reason that many experts recommend waiting until age 70 to claim benefits. At 70, assuming you’ve delayed benefits, you will receive 132% of the base benefit you are entitled to.
For some people, this is not an option. Before you rule out whether or not it is an option for you, take a moment to explore the avenues (or funds) that could carry you through delaying your benefits. Do you have a 401(k) or IRA that you could count on from retirement through age 70? Or, do you have a job you could stand to stay at for an extra 5 years?
Whatever your situation may be, do the math and prepare yourself ahead of time to receive the maximum Social Security benefits in retirement.
Today's post is guest post written by Blogger and freelance writer
Danielle K Roberts from BoomerBenefits.com
Check out these additional articles from Danielle over on her website
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