By Lee Sherman
Any journey where you hope to reach your destination successfully starts with a plan. While many people don’t start to think about Social Security until it’s time to cash in on it, most financial advisors would recommend you start to understand the available options much earlier, as it is a bulwark of your overall retirement plan.
If you’re single, conventional wisdom suggests that the longer you wait to claim benefits, the more you’ll receive. Depending on when you were born, full retirement occurs at either 66 or 67. Each year you wait will increase your benefits by 8 percent. And that’s without considering the other financial benefits that could occur. For example, if you’re able to work longer you’ll be able to invest more in your portfolio (recommended when one spouse is a different age than the other).
Social Security Mind Tricks
A few lesser-known approaches can ensure that you can maximize your Social Security benefits. The Social Security Administration (SSA) is a good place to start if you want to understand your benefits. But, since everyone’s circumstances are different and you’ll want to make sure you don’t miss a trick here, you’ll want to consult with a certified financial planner or retirement expert.
Claiming early (before you’ve reached full retirement age) makes sense for some people but if you ever feel you made the wrong decision, did you know that, if you are within 12 months of filing for Social Security, you can reverse that decision and pay back all of the benefits you’ve received thus far? Poof, it’s as if you never filed before!
If you wait until retirement age, you can suspend your benefits without the penalty of having to pay back the money that has already been paid out. For each month of suspension, you’ll receive delayed retirement payments which will increase your benefits as you age.
Understanding how household benefits work can be quite complex and depends on a number of factors including the retiree’s age, the age of his or her spouse, and the age of his or her children, among other things. The dependent child benefit can be particularly significant, comprising half of the benefit of the parent’s retirement benefit. Whether you are married, a widower, or divorced can also help determine your benefit.
If you’ve paid into the system for at least 10 years you are eligible for Social Security Benefits but with a few simple financial hacks, you can be sure to maximize the amount of money you receive. Consider working with a financial planner to come up with a personalized plan that takes into account such things as your age and marital status.
Lee Sherman is a contributing writer to www.myperfectfinancialadvisor.com, the premier matchmaker between investors and advisors. Lee is an experienced journalist and editor with over 30 years of expertise with a significant history of writing in the personal finance and technology arenas.
