Maximize Your Retirement Savings with These 5 Social Security Strategies
Retirement planning is no joke. It can feel overwhelming, especially when you don’t have a partner to help take on the task. Fortunately, Social Security can be an incredibly helpful tool in planning for retirement.
With a few key strategies and some careful consideration, you can maximize your benefits and make sure you’re set up well for the future. Here are five social security strategies that will help make retirement a breeze.
5 Social Security Strategies to Help You Save More
1. Delay Taking Benefits Until You Reach Full Retirement Age
Your full retirement age depends on the year you were born, but it’s generally between 66-67 years old. And if you wait until then to claim your benefits, you’ll get about 8% more per year than if you start taking them at 62 (the earliest age allowed).
That means if you wait four years after becoming eligible, your monthly check could be 25% higher than it would have been otherwise! Plus, when you delay taking Social Security until full retirement age or later, it won’t impact any other income sources like pensions or 401(k)s.
2. Take Advantage of Spousal Benefits
If one spouse has significantly higher earnings and the other doesn’t work or earns very little money. They’re both at least 62 years old, then they may be able to take advantage of spousal benefits. Which allows the lower-earning spouse to collect half of their partner’s Social Security benefit amount instead of their own (which might be much lower).
This strategy can bring in hundreds more every month than what they’d receive on their own. As long as they wait until full retirement age or later to begin collecting benefits.
3. Consider Working Part-Time During Retirement
Social Security payments are based on your annual earnings throughout your life. So working part-time during retirement could actually increase your benefit amount. All by adding more money into the calculation without raising taxes too much.
Because most of what you earn over $17K each year isn’t taxed by Social Security anyway (with exceptions for those who turn 72 before 2027). Plus, having something to do during retirement is always a plus!
4. Move Before Applying for Benefits
It may sound strange but moving to certain states (like Texas) before applying for Social Security benefits can actually save retirees money. Since there’s no state tax on income from Social Security in some states while others tax all types of income. Including those from federal programs like SSI and SSDI so pay attention to where you live!
5. Utilize Tax Planning Strategies
If your combined income, including taxable investments such as IRAs and 401(k)s, is above a certain threshold ($25K for individuals and $32K for married couples filing jointly). Then up to 85% of your social security benefits could be taxed.
Which could really add up quickly over time. So using tax planning strategies like Roth conversions or charitable giving can help reduce this burden substantially. By reducing taxable incomes below these thresholds each year before filing taxes again next April 15th!
Don’t Miss Out on These Social Security Strategies
When it comes to maximizing your Social Security benefits, there’s no one-size-fits-all solution. Everyone has unique circumstances that require individualized strategies.
But these five tips should help get any man started on his path towards successful retirement planning! Remember that with careful consideration and strategic planning now, retirement doesn’t have to be stressful.
It can be a time of relaxation and enjoyment with ample funds available thanks to smart financial decisions made in advance! Good luck!
