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Making the Most of Social Security: Simple Steps to Understand Potential Benefits

| March 19, 2024

Making the Most of Social Security: Simple Steps to Understand Potential Benefits

As retirement nears there is a critical decision to consider: When to start claiming Social Security benefits. This choice can significantly impact your financial stability in your golden years. Let's explore some concepts and ideas to look at.

Assess Your Finances: Evaluate your overall financial situation, including savings, pensions, and expected expenses. If you have other income sources, delaying Social Security could lead to higher benefits over time.

Consider Your Health: Your health status matters. If you're healthy and expect a longer life delaying benefits could make sense. If health issues are a concern claiming earlier could make more sense. 

Think Long-Term: Consider your long-term goals and whether you plan to continue working. Understanding your objectives will help determine the best time to claim benefits.

Know Your Full Retirement Age (FRA): Your Full Retirement Age (FRA) is when you're eligible for full Social Security benefits. It varies based on your birth year, typically between 66 and 67. Claiming earlier results in reduced benefits, while delaying can increase them. There is also the possibility of delaying Social Security to 70 to get the maximum benefit.

Spousal and Survivor Benefits: Married individuals should consider spousal and survivor benefits. Spousal benefits allow a spouse to claim based on their partner's earnings, while survivor benefits provide support after a spouse passes away.

Understand Tax Implications: Be aware of the tax implications of Social Security benefits based on your total income. If you are still working, there is the potential for your social security benefits to be taxed. Consulting a tax advisor can help you plan accordingly.

Conclusion: Navigating Social Security doesn't have to be daunting. By considering these concepts you can make informed decisions that maximize your benefits and support your financial security in retirement. These are just a few general concepts to consider. For personalized guidance consider consulting with a financial advisor that specializes in retirement planning.