3 Ways to Increase Your Social Security Benefits
There are a variety of issues that families will need to consider during the financial planning process. For many people, the most significant concerns to address are related to retirement planning. In addition to using the money that you have saved in different types of retirement accounts, you may also receive benefits from Social Security after you retire (and in some cases before). By understanding the steps that can be taken to increase Social Security benefits, you can maximize the financial resources that will be available to you, which can help you prepare to live comfortably throughout the rest of your life.
Tips for Maximizing Social Security Payments
The benefits provided by Social Security are based on the income you earn throughout your career and the Social Security taxes you have paid. 40 quarters (10 years) are required for eligibility; but once eligible, the calculation itself is based on a much longer time frame. There are a number of strategies that can help increase the amount of benefits you will receive, including:
- Work at least 35 years - Social Security benefits are calculated based on your average indexed monthly earnings (AIME) in the 35 highest-earning years during your career. If you worked less than 35 years, your income for any years you did not work will be zero, which will significantly lower your AIME. By working for at least 35 years, you can ensure that your AIME will be higher. Working more than 35 years at a higher income will increase this average, resulting in higher benefits upon retirement.
- Delay benefits until reaching full retirement age or later - While you can begin receiving Social Security benefits once you reach the age of 62, the amount of benefits you can receive will be reduced if you retire before reaching the age that Social Security considers to be your full retirement age. For those who were born in 1960 or later, this age is 67. Once you reach your full retirement age, you can receive 100 percent of your Social Security benefit. Delaying retirement for additional years will lead to an increase in the benefit you can receive.
- Maximize income in the years before retirement - In 2022, annual earnings of up to $147,000 may be subject to Social Security taxes and used to calculate your retirement benefits. Even if you do not earn the maximum amount, a higher income in the years immediately prior to retirement will increase your AIME, resulting in a higher benefit once you reach retirement age.
Contact The Krajniak Group for Social Security Planning in DuPage County
Deciding when to start Social Security benefits can be a complex process, but by working with a financial planner, you can determine the best steps to take to increase the amount you can receive and address your financial needs after retirement. At The Krajniak Group, we can advise you on ways to prepare for the future, and in addition to addressing Social Security, we can also help you manage investments, retirement accounts, and other aspects of your family’s financial plan. Get in touch with The Krajniak Group for the Naperville retirement planning services you need by contacting us at 630-364-2406
