Social Security benefits are easy to overlook when retirement planning. You might be accustomed to deductions coming out of your pay during working years and know you will get monthly income during retirement. However, the Social Security statement can be confusing and there are benefits that many retirees are not aware of, such as spousal and survivor benefits. It is critical to properly time and plan your distributions to maximize your Social Security income. Here are three steps you can take to make sure you get the most out of Social Security.
If you start receiving social security benefits before your full retirement age, you benefit is reduced by about 6% per year. For example, if you start receiving benefits at age 62, you would only receive 70% of the benefits. However, if you wait to start collecting Social Security until after your full retirement age, your benefit amount will actually increase. For each month you wait, your benefit amount increases by about 0.67% per month or 8% per year. If your full retirement age is 67 and you wait to collect Social Security until age 70, you will receive 124% of your benefits.
Claim All Your Benefits
Make sure that you take all of the benefits available to you based on your work history as well as your current spouse, ex-spouse, deceased spouse, and/or deceased ex-spouse.
Timing is Important
You might be eligible for spousal or survivor Social Security benefits in addition to your own benefit. Retirement benefits are based on your own earnings history. Spousal and survivor Social Security is based on your spouse's earnings. However, you won't be able to collect both at once so you need to time when you take your benefits to maximize your total retirement income.
Contact a Gaulden & Associates advisor to make sure you are maximizing your distribution options.