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Social Security is an invaluable, but complicated, part of most seniors’ retirement planning. When it comes to claiming your Social Security, here are three more mistakes that are crucial to avoid.
1. Forgetting Your Ex-Spouses
As long as you were married for ten years, you can claim spousal benefits from your ex, as long as you haven’t remarried. To qualify, you must be at least 62-years-old and your own personal Social Security benefit cannot succeed the value of your ex-spouse’s benefit. If you choose to claim both your own benefit and your ex’s, and you’re not yet at your full retirement age, a combination of money will be drawn from both accounts to match whichever amount is higher. You can also draw only your spousal benefits and delay drawing your own Social Security until later. Ultimately, if you choose to draw benefits through your divorced spouse, make sure you consult with an expert first.
2. Too Much Income
Once you start drawing Social Security, you may be penalized if you make above a certain amount of money. If you start drawing before your full retirement age, you can’t make more than $15,720 a year without incurring penalties to your benefit, $1 less for every $2 extra you make. In the year of your full retirement age, you must not have made more than $41,880 in the months before your birth month, or you’ll be penalized $1 for every extra $3 earned. After you’ve passed full retirement age, however, you can earn any amount without penalty.
3. Working Less Than 35 Years
Your Social Security benefit is calculated in part using the average of your highest 35 years of income. If you haven’t worked 35 years, you’re missing out on additional money you could receive, because the total of your whole income will still be divided by 35 to calculate your monthly benefit payment. Even if you take a part-time job before you reach full retirement age, that income will mean you receive a higher benefit.
Social Security is one of the many complicated factors of retirement. For many of today’s retirees and soon-to-be-retired, maximizing this benefit is important because it can be difficult to build savings or increase income after taking retirement. If you find yourself in need of an investment nest egg or some supplementary income, you might consider a life settlement. Life settlements often offer life insurance policy owners the option to sell their policy for a large upfront sum of money while also avoiding any future premium payments.
To see if you qualify for a life settlement, visit our Qualification Calculator today!