May 23rd, 2011|
A new blog post on the Forbes website divulges the best strategies for gleaning the largest possible amount from the Social Security Administration each month. Financial educator Liz Davidson breaks it down with these five suggestions, saying, “The only problem [with these secrets] is that if more people knew about it, our government would be even more broke than it already is so let’s keep it a secret.”
1) Work longer. While Davidson admits that this is the least popular option for increasing your Social Security, she points out that your benefits are based on the average of your highest 35 years of earnings and that since you’re likely earning more towards the end of your career you’ll do yourself a financial favor by hanging in there a bit longer.
2) Delay taking Social Security. Nearly 70 percent of Americans collect Social Security early but by holding out until full retirement age you can increase your benefit by a quarter or even a third—adding up to an extra eight percent in benefits for each additional year that you wait.
3) Take your spousal benefit while you wait. If you’re at retirement age and your spouse has filed for Social Security, you may consider collect spousal benefits while waiting for your own benefits to grow.
4) File and suspend. If you’re married and are the higher-earning spouse, you might want to file for benefits, then suspend your benefits and continue working; this way your spouse can collect spousal benefits while your own benefits grow.
5) Pay less of your Social Security to the IRS. Davidson suggests that while waiting for your Social Security to grow, you could cover your expenses with your 401(K) or IRA. In this way, you’re “taking more from your taxable retirement accounts when your Social Security income is low and less when it’s higher.” This means you’ll pay the IRS less taxes on your Social Security income.
Do you think that it’s worth the wait to collect more Social Security?
If you need help with your Social Security benefits, contact the Social Security Disability lawyers at Fleschner, Stark, Tanoos & Newlin.