Maximizing Your Social Security Makes a Big Difference

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Published by Taylor Financial Group

How do you picture yourself spending your years in retirement? Travelling, gardening, or spending time with grandchildren? No matter how your retirement daydreams play out, you should know that maximizing your Social Security is critical to making the most of your retirement income!

Filing for Social Security too early may impact you in a negative way. People are living longer lives and have way more years to fund. Just think about all the expenses you could have during those 25-35 years in retirement, especially when it comes to healthcare. Unfortunately, 42% of people file for early benefits simply because they don’t understand the advantages of delaying their Social Security.

Think of it in terms of numbers. If you start collecting at age 62, you reduce lifetime benefits by 25 percent! Looked at another way, waiting until age 70 nets a 32 percent lifetime gain. The chart below helps break down the numbers and illustrates how waiting to file can make a big difference.

 

And if you are married, then you should always think about Social Security from a “couples” point of view. And be careful because there are 8,000 options to choose from! Keep in mind that a spouse can collect “spousal benefits” which amounts to 50% of the higher-earning spouse’s income (if that spouse is also collecting themselves). For example, if your husband has started to collect, you can earn 50% of that money, have your own Social Security benefit grow, and then switch over to your own benefit at age 70!

Social Security is also a tax advantaged income flow that not only benefits you, but can also benefit your children and grandchildren. While it’s not one of the more well-known benefits, under the right conditions, grandchildren can receive a benefit based on the work history of a grandparent. Furthermore, children can receive Social Security benefits because one or both of their parents are either disabled, retired or deceased. Most people don’t know about the qualifications and rules for this benefit, so they don’t know to apply for the children in their lives.

If you have questions about your Social Security benefits, don’t hesitate to give us a call.  After all, we want to help you save money and plan for a successful and happy retirement!

 

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