INCOME PRESERVATION SECRETS – VOLUME 3
Special Retirement Planning Bulletin
Getting the Most Out of Social Security
When you first begin working and you see money subtracted from your paycheck for Social Security taxes, it can feel pretty painful. But when you reach retirement age and you finally qualify to receive Social Security income, it will be a huge help toward achieving long-term financial stability.
Social Security is a relatively straightforward system, but that doesn’t mean there aren’t ways to maximize your monthly Social Security payments. Here are four tips to help you do just that.
Tip One: Wait to File
For most people, it’s best to wait until full retirement age before filing for Social Security benefits. Otherwise, you might lose as much as 30 percent of the benefit you’re entitled to. But you can also increase the amount you get by postponing filing until after reaching full retirement age. You’ll gain as much as 8 percent in annual delayed retirement credits between your full retirement age and 70.
Tip Two: Save the Income
You may receive Social Security income every month—but that doesn’t mean you have to use it to pay your bills. You can take the income you receive from Social Security and save it in a secure, fixed account or fixed indexed annuity and allow it to grow. Do this while you’re still working and you can exponentially increase your retirement savings before you ever have to use them.
When using a fixed indexed annuity to facilitate this growth, you can even design another form of lifetime, guaranteed income with inflation protection and a death benefit for your heirs.
Tip Three: File for Spousal Benefits After Divorce
If you’re divorced but were married at least 10 years to your former spouse and are not currently married you can still qualify for the spousal benefit from your former spouse. It might be worthwhile to claim this benefit if your former spouse was a higher earner than you.
Tip Four: Work Longer
Your Social Security payments are calculated based on your highest 35 years of earnings. This means you may want to work longer in order to raise the average, especially if you have years without any income. Even if you’ve worked consistently for 35 years you still may want to work if your current income is much higher than your earlier income, since this will bring your average earnings up.
Social Security is a flexible program designed to help supplement your post-retirement income in a meaningful way. Using these tips, you can ensure you’re getting the most out of a system designed to help.
In the next volume of the INCOME PRESERVATION SECRETS series, I’m going to show you the many ways a life insurance policy can help supplement your postretirement income.