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Most Americans rely on Social Security benefits for their retirement income, if not most of it. It's possible to provide a big chunk of your retirement income, so be sure you're familiar with the program and how to make the most of it.
Here are five important things to know about Social Security, along with some helpful actions you can take.
Two red dice on your social security is enough
Image source: Getty Images.
<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tip No. 1: Know your full retirement age"data-reactid =" 34 ">Tip No. 1: Know your full retirement age
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Let's start with the basics. a "full retirement age," at which we're entitled full Social Security benefits. You might be assuming that that age is 65. Well, it used to be 65 years old, but it was all about social networking. the 1940s. Many people's full retirement age is increased, and you can find yours in the table below: "data-reactid =" 35 "> Let's start with the basics. to start receiving our full Social Security benefits. You might be assuming that that age is 65. Well, it used to be 65 years old, but it was all about social networking. the 1940s. Many people 's life is increased, and you can find them in the table below:
|
Birth Year |
Full Retirement Age |
|---|---|
|
1937 or earlier |
65 |
|
1938 |
65 and 2 months |
|
1939 |
65 and 4 months |
|
1940 |
65 and 6 months |
|
1941 |
65 and 8 months |
|
1942 |
65 and 10 months |
|
1943-1954 |
66 |
|
1955 |
66 and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 and 8 months |
|
1959 |
66 and 10 months |
|
1960 and later |
67 |
Data source: Social Security Administration.
<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tip No. 2: Know how much income to expect"data-reactid =" 39 ">Tip No. 2: Know how much income to expect
Next, you're in the mood for success, you can expect to receive social security in retirement.
The average Social Security retirement benefit was recently $ 1,415 per month, or about $ 17,000 per year. If your earnings are above average, though, you'll get more money out of the Social Security program than most people. The recent maximum monthly social security benefit was $ 2,788. (That's about $ 33,500 for the whole year.)
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "You can find out what you Social Security Account with the Social Security Administration (SSA). That's also where you can change your address, check the status of your application for benefits, ask for a replacement Social Security card, request a replacement Medicare card, or get a replacement SSA-1099 or SSA-1042S form for tax purposes – among other things. Setting up an account is a smart thing to do. It can also prevent you from having a headache, if you set it up before you start doing it. "Data-reactid =" 42 "> You can find out what you Social Security Account with the Social Security Administration (SSA). That's also where you can change your address, check the status of your application for benefits, ask for a replacement Social Security card, request a replacement Medicare card, or get a replacement SSA-1099 or SSA-1042S form for tax purposes – among other things. Setting up an account is a smart thing to do. It can also prevent you from having a headache, if you set it up before you do it, pretending to be yourself.
A hand drawing an upward sloping line on a graph, above dollar signs that are increasing in size
Image source: Getty Images.
<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tip No. 3: Learn how to maximize your benefits"data-reactid =" 68 ">Tip No. 3: Learn how to maximize your benefits
You know how much money you can expect to get from Social Security There are a number of ways to increase your Social Security benefits. A key way to do so to delay starting to collect them.
No matter how high your retirement age is, you can start collecting your benefits as early as age 62 and as late as age 70. For every year you will increase their value by about 8% – until age 70. So delaying from age 67 to 70 can leave you with 24% fatter. Not surprisingly, if you start collecting early, your benefit checks will be smaller. (It's still a good idea for many, if not more, people to start collecting at age 62.)
The table below shows the value of your social security benefits. It gives you a rough idea of the fact of waiting for you.
|
Start Collecting at: |
Full Retirement Age of 66 |
Full Retirement Age of 67 |
|---|---|---|
|
62 |
75% |
70% |
|
63 |
80% |
75% |
|
64 |
86.7% |
80% |
|
65 |
93.3% |
86.7% |
|
66 |
100% |
93.3% |
|
67 |
108% |
100% |
|
68 |
116% |
108% |
|
69 |
124% |
116% |
|
70 |
132% |
124% |
Data source: Social Security Administration.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "So if you decide not to delay collecting your benefits How do you still increase those benefits? most money (adjusted for inflation) If you only earned income in 31 years, the formula will be incorporated into your life. -have worked 35 years, if you're currently in the past (on an inflation-adjusted basis), you might consider working for another year or two, as each high-earning year will kick a low-earning year Out of the calculation, boosting your benefits. "data-reactid =" 75 "> How do you increase your benefits? One way is to be sure The formula is the most used (35 years old in the world). Oven zeros, which will shrink your benefits. -have worked 35 years, if you're currently in the past (on an inflation-adjusted basis), you might consider working for another year or two, as each high-earning year will kick a low-earning year out of the calculation, boosting your benefits.
If you can manage to earn more, you'll probably end up with fatter benefit checks. Even if you have 35 years of earnings already, if you're earning $ 75,000 now and some of your early years inflation-adjusted incomes of, say, $ 30,000, you can increase your benefits -income years can be included in the calculation, replacing some low-income years.
It can also be worth considering the SSA's record of your income and taxes paid to the Social Security system, to make sure it's ok. If it's not, you might have received more benefits than you've actually earned. Simply correcting an error might increase your benefits!
<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tip No. 4: Coordinate a strategy with your spouse"data-reactid =" 78 ">Tip No. 4: Coordinate a strategy with your spouse
If you're married, you have more Social Security Strategies to consider than single people. For example, you and your spouse may be more likely to have the benefit of having a relationship with the family. That way, you'll both enjoy some income earlier, and when the higher earner hits 70, they can start collecting extra-large checks. Also, should that higher-earning spouse die first, the spouse with the smaller earnings history.
It's not a bad idea to have a positive attitude to a professional advisor, if you're not confident that you have a good track record. Advisors designated as fee-only, and you can find one at www.napfa.org.
<h2 class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Tip No. 5: Do not assume that Social Security is doomed – or absolutely hunky-dory"data-reactid =" 81 ">Tip No. 5: Do not assume that Social Security is doomed – or absolutely hunky-dory
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Finally, do not fall for alarmist reports that Social Security is not going to be around – it will be around might be weakened. For example, one worst-case scenario has ended up with about 75% of the benefits they have been expecting. "Data-reactid =" 82 "> Finally, do not fall for alarmist reports that Social Security is doomed be around when you need it. might be weakened. For example, one worst-case scenario has ended with 75% of the benefits they have been expecting.
The good news is that there are plenty of ways to strengthen the program. It will just take action on the part of our representatives in Washington.
The more you know about Social Security, the best off you might be in retirement.
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More From The Motley Fool "data-reactid =" 85 "> More From The Motley Fool
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The Motley Fool has a disclosure policy."data-reactid =" 90 ">The Motley Fool has a disclosure policy.
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