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Americans grow older knowing there will be Social Security benefits set aside for them after we reach 62. However, we’ve also now all become aware that in many cases, these benefits are not substantial enough to sustain retirees long-term. It all depends on which benefits you choose to take at which time. Here are some unknown strategies you can employ to find bonuses in your Social Security, which may help close the gap.
Remember: you should talk to your trusted advisor before taking any steps that will impact your retirement.
Withdraw, then Delay
If you’re already at retirement age and collecting benefits, you can contact Social Security and say you want to suspend the benefits until a later time, say when you reach age 70. You will then receive a Delayed Retirement Credit. It can increase your benefits by 30 or more percent, so if you can bear to delay the check, it’s worth considering.
Wait Until Age 70 to Retire
Don’t worry–the Delayed Retirement Credit will also apply if you choose not to use any benefits until age 70. In that case, it may even net you more benefits thanks to adjustments for inflation, the fact that you’re not retiring “early” at age 62, and adjustments based on any income you’ve earned between ages 62 and 70.
Strategize with your Spouse
The connections between your benefits and your spouse’s are a complicated web, and you should absolutely consult a financial expert before making any decisions. However, here is something to consider: if you take your retirement “early,” your spouse may be forced to take their own retirement at a reduced level permanently if they apply for retirement around the same time –even if they’re older and don’t count as retiring early. However, if your spouse is older and the lower earner in the household, they may be able to just apply for a spousal benefit, and delay their own benefits until age 70, at which time they will earn the credits mentioned above. This can apply even in cases of divorce, so do your research!
Repay if You Don’t Need It
If you started collecting Social Security benefits in the last year but then found you wanted to keep working or don’t need the additional income, you can repay what you’ve withdrawn and delay until a later date, when your benefits may be increased.
Don’t Sweat Working in your 60’s
The Social Security Administration applies an earnings test to its beneficiaries to assess income. This could possibly cause your benefits to be reduced while you’re still working, especially if you have a spouse, but once you hit full retirement age, those reductions will be recompensated thanks to what’s called the Adjustment of Reduction Factor. It’s always to your benefit to keep earning as long as you can–and saving, to boot.
Social Security is every working American’s right as a retiree. There are literally thousands of ways you and your spouse can choose to receive these benefits. Online calculators provided by the administration don’t adequately take into account everyone’s unique situations. Empowering and informing yourself is the best means of ensuring you’re getting the most out of your investment. (Our online calculator, on the other hand, is a very reliable means of determining if a life settlement is a good solution to cash flow issues.) Consult with experts to plan for the retirement you’ve always imagined.