After decades of working, you are finally allowed to enter Social Security when you reach age 62.
That extra money can be tempting, especially as we struggle with higher costs for gas, groceries, utilities, housing and more. But for many near-retirees and retirees, it makes sense to wait to receive your benefits. Regardless of when you plan to enroll in the program, it’s important to review some overlooked Social Security information that can permanently reduce your monthly income.
Start with your social security statement
You can start your review with your Social Security statement, which you can access by logging into your account on the Social Security Administration website. This statement shows lifetime benefits and the average of your retirement benefits at different claim years.
Check your salary record. Those records help the Social Security Administration determine how much you’ll get in benefits, so it’s important that they’re accurate. Any inaccuracy can lead to low profit. Verify records with your old W-2s, tax returns and pay stubs. Pay close attention to the years you changed jobs or were self-employed, as those years may contain missing information.
Compare the age of the claim, not just the month number
While checking your earnings history, you also get to see how your estimated earnings change based on when you apply for benefits. You can see how much you might get if you reach Social Security at 62, full retirement age, 70 or any age in between.
Social delay will lead to higher profits. However, some people don’t wait until they turn 70 because they need immediate cash flow. It may be easier to switch from full-time work to part-time work if you take Social Security early. Health, work plans and life expectancy should play a role when claiming benefits.
Married couples must work together when receiving benefits. It usually makes sense for a high earner to wait until 70. That way, the higher-earning spouse’s Social Security benefits can enhance the lower-earning spouse’s survivor benefit, if any. You may want to use a bridge strategy, which involves living off your savings to delay claiming benefits.
Check for details that may increase the claim
While your income history is one of the most important things to check, there are other details to check. A portion of your Social Security benefits may be taxable, depending on your combined income. Therefore, you should check when you want to retire and state that before claiming benefits. It may also be beneficial to use tax-deferred retirement accounts as a bridge to spread your tax burden over time while maximizing your benefits.
Set up your Social Security account and enter personal information such as your direct deposit information before you’re ready to claim benefits to minimize delays. Remember, you don’t need to be proficient in every aspect of Social Security and understand every little detail about your statement. However, checking your information and creating a Social Security account now can help prepare you when you claim benefits. You can use this information to determine the best time to access Social Security.
