Are You Leaving Money on the Table with Social Security?
Greetings!
This Week: Are You Leaving Money on the Table with Social Security? (Answer: most likely.)
For those who follow one of my social media platforms, it should come as no surprise that I like considering what we’re missing re: Social Security and what we’ve come to accept as gospel vs. what we need to learn on our own to make the right choice for each of us. The truth, as is the case in every financial decision we will ever make, is that there is no “right” answer for all of us, but there are certainly right answers for each of us, individually.
Social Security continues to be one of the most powerful tools for financial security, but many people leave thousands of dollars on the table by not asking the right questions. This week, we’re diving into three critical questions you should ask yourself about Social Security and how to take action today to learn more.
1. Are You Claiming Benefits at the Optimal Age?
Why It Matters:
The age at which you start claiming benefits could mean the difference between receiving 70% or 124% of your benefit. The full retirement age varies depending on your birth year, and waiting to claim after this age can increase your monthly payout. That said, as I note in every video, do not base your thinking solely on a monthly benefit but rather a potential aggregate benefit and how that might impact your financial well-being.
Action Step:
Determine your full retirement age and explore the impact of claiming early or late. Use the Social Security Administration’s (SSA) Benefits Calculator to see how timing impacts your benefits.
2. Have You Maximized Spousal or Survivor Benefits?
Why It Matters:
If you're married, divorced, or widowed, you may be eligible for spousal or survivor benefits, often overlooked by claimants. These benefits can add up to 50% of your spouse's benefits or provide a higher amount if you're widowed.
Action Step:
Review your eligibility for spousal or survivor benefits by logging into your My Social Security Account. This tool will also show your earning history to ensure it's accurate. If it’s not accurate, let them know immediately! Also, if you haven’t been to ssa.gov to setup an account and look at these comparisons, that’s your homework right now!
3. Do You Understand How Working Affects Your Benefits?
Why It Matters:
Earning income while receiving Social Security benefits can reduce your monthly payments if you’re below full retirement age. However, those reductions are often temporary, and you may get the money back later. That’s a good thing in the long run, but it can obviously impact your benefits in the short run.
Action Step:
Check out the Retirement Earnings Test Calculator to see how much you can earn without impacting your benefits. Then, plan your retirement income strategy accordingly. (Note: you might need to be logged into ssa.gov to access this tool.)
Closing Thought:
Social Security is one of the most misunderstood yet essential pieces of your retirement strategy. By asking these three questions and using the resources above, you can make informed decisions to maximize your benefits and secure your financial future.
Hope this helps guide your thinking, and please (and always) remember that just because I share what I will do, it certainly doesn’t mean that’s what you should do.
Stay well, and have a great week.
Tyler
