With careful planning, your Social Security benefits can increase over time. A more comfortable retirement is possible with increased Social Security benefits. After all, the program already includes adjustments for inflation to keep participants’ purchasing power stable. Moreover, the benefits are permanent. The average Social Security benefit is only $1,661 per month, which is not a large amount. There are ways to increase your benefits and receive more money in each check, which is good news. Here are your insider tips to maximize your Social Security benefits. 1. Working together with your spouse can help increase the benefits you both get. By collaborating with your spouse, you can maximize your Social Security benefits. If you’re married, you can substitute your spouse’s retirement benefits for your own. At full retirement age (FRA), a spouse is entitled to up to 50% of the standard benefit of their partner. However, you cannot receive them unless your spouse has applied for retirement benefits. You must determine whether the higher earner should start receiving payments immediately for the lower earner’s spousal benefits. It may be beneficial for the higher earner to put off filing for a benefit to maximize the more significant benefit they are entitled to receive. In addition, the survivor benefits would increase because the last surviving spouse keeps the higher of the two checks. A higher earner may put off paying child support if a lower earner can collect enough child support money to keep the family afloat. Some households might benefit more from this option. 2. Your benefits will increase if you work longer and earn more money. Your earnings history, not your age, will determine your benefit amount. Your benefit is determined when you reach full retirement age as a percentage of your average earnings (adjusted for inflation) over the 35 years leading up to retirement. To avoid having years of $0 wages counted toward your average earnings and thereby reducing your Social Security checks, you should aim to work for at least 35 years. Working longer can be worthwhile if your salary increases with experience. Any time spent working after age 35 will not be factored into your benefit calculation. Your retirement benefit can be increased by substituting years of service at a higher-paying job for years of service at a lower-paying job. 3. Delaying your benefit claim can increase its value. Some individuals may be surprised to learn that their benefit amount may vary with age. However, this may have more of an effect than almost any other choice you make. Full retirement age is a number assigned to each retiree. The average lifespan of a person born in 1956 or later is between 66 and 67 years and four months. But you can delay applying for benefits past that point if you wish. At age 62, you become eligible to begin receiving benefits. If you start receiving payments before your FRA, the amount you receive each month will decrease. However, if you’re willing to wait past your FRA, your benefits will increase by 8% per month up to age 70. 4. A smart retirement strategy can help you keep a larger portion of your Social Security benefits. Finally, consider the retirement account you’ve used to put away money. When a person’s income surpasses a certain threshold, Social Security benefits are added to that income and taxed accordingly. To determine the taxability of benefits, however, only distributions from traditional IRAs or 401(k)s will be considered; distributions from Roth accounts will not be considered. Consider making contributions to a Roth IRA over your working life if you want the freedom to withdraw as much of your savings as you like in retirement without worrying about triggering a taxable Social Security benefit. Because the IRS won’t be taking a percentage of your Social Security benefits, you may end up with a bigger check. With these four key insights into increasing your monthly Social Security payment, you should be better equipped to make the decisions necessary to secure your retirement finances.
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