In Part Two of our tutorial on how to maximize Social Security we discuss:
When should you apply for benefits?
Well, comes down to three things mainly: your health/life expectancy, your CURRENT income needs and your survivor needs.
Delaying when you file not only increases your benefit when you ultimately do file, but you get increasingly more benefits each year due to Cost O Living Adjustments.
So, at 70 your benefit will be 1900 more, per month, than if you took an early benefit at 62.
At age 80 the spread will grow to $2500 a month. At 90 the the difference has grow to $3000 a month!
So, don’t just get caught up in the differences of monthly benefits now, you need to look at how those differences change over time. And it’s just remarkable.
How to increase my benefits?
Number one thing you can do is to log into SSA.gov and verify your AIME is correct. If there are missing data in there, you need to contact Social Security to get it changed.
Second thing is to improve your earnings record. What we mean by that is your benefit amount is based on your top 35 years of earnings.
So if you had some years you made little or no money, every year you work where you make decent money will be added to your overall working record, either eliminating the years you made nothing or increase your total earnings record.
Those increases will only add to your overall Social Security benefit.
Coordinate spousal benefits:
The “File and Suspend” strategy is dead now. However, if you were born before Jan. 2 1954 you can still file a restricted application in which you draw your spousal benefits AND allow your own benefits to grow with the Delayed Earnings Credits. Your spouse MUST be receiving his benefits for this to work, however
Born after 2 Jan 1954, well not much you can do at this stage. However, we do discuss a couple strategies in the video. Most likely you should BOTH wait until your 70 to draw. Or have the lower earning spouse draw early while the higher earning spouse waits.
Finally, MINIMIZE TAXATION ON BENEFITS! The more Social Security benefits, the less tax. It’s that simple!
Take advantage of the Golden Years of Tax Planning, the ages between 62 and 70. Move traditional IRAs to Roth at this time.
Lots of strategies…IF you plan accordingly!
See Part One here.