23 Apr Off
If you’re going to retire soon, it’s a good time to discover how to increase your Social Security benefits. There are little-known strategies that can help boost your benefits.
Take Legal Advice
Going straight to the source looks like a great way to get authentic information about the right time to file for Social Security. However, it’s not.
The representative of Social Security Administration (SSA) you go to might have pure intentions when they give you advice about your specific circumstances. But, because this person is likely undertrained, they may give you incorrect information.
If you get to know about the mistake later, you might not be able to correct it, even if it is because of the faulty advice from the SSA.It’s the SSA’s own rule.
If you do go to the SSA for advice, it is wise to consult with at least one financial advisor who specializes in the area and give you expert advice on social security planning.
Withdraw Your Social Security Application
It’s an opportunity to reverse a claiming decision you regret. If you’re within the first twelve months of claiming and you have sufficient cash available, you can take back your application and repay all the benefits you’ve received so far.
Doing this is like, “then it is like you never claimed in the first place,” says Arthur Prunier, a retirement income certified professional® instructor at the American College of Financial Services. He further states,
“Lots of people file for Social Security without fully understanding the consequences, for example, many people choose to claim Social Security before full retirement age, but later wish they had not done so.”
Suspend Your Social Security Benefits
Once you get to full retirement age, you can willingly suspend your Social Security benefits. If you do so, it will boost your future benefits—and you don’t require repaying the benefits you’ve already taken.
Following is an example showing why you should voluntarily suspend your benefits after full retirement age.
John started receiving Social Security benefits at 63 years old. His full retirement age is 66, and his full monthly benefit is $1,000. Because John stated receiving benefits 36 months early, his monthly benefit was reduced to $800.
When John turns 65, he realizes it was a mistake to have started his benefits early. However, more than 12 months have passed since starting benefits, so he can’t withdraw her application.
All is not lost. John can file to willingly suspend his benefits at 66 years old. For each month of suspension, John is eligible to earn delayed retirement credits worth 2/3 of 1% per month—or 8% per year.
If John waits until age 70 to resume his Social Security benefits, the plan will increase his monthly benefit by 2/3 of 1% for 48 months, or 32%.
Maximize Your Household Benefits
If you have a spouse or minor children living with you, then you should examine how your claiming strategy affects them. The often-heard advice is to delay claiming until age 70 if you can afford to. Although that may not be the most suitable option if you’re in your 60s and still have minor children at home—it is not something uncommon in blended families.
In this situation, you might receive more benefits in the long run by claiming at a younger age so you can receive dependent benefits.
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