Top 7 Social Security Tips to Follow for 2021
Did you know that there are over 65 million beneficiaries lined up in 2020?
Once you retire, you don’t have any guarantees that you’ll have money to spend the next time you’ll look for some. This is why it’s important to get yourself a good Social Security plan. With this in your pocket, you can secure some funds for you to use in a pinch.
Once you get yourself a Social Security account, you shouldn’t relax and take your money when you need it. You need to keep on top of it to make the most of it. These Social Security tips should help you keep track of your account and maximize your benefits.
1. Be Careful in Choosing Your Starting Age
Many people think that investing in Social Security sooner is always better. What they don’t know that the sooner they invest, the lesser their benefit you’ll get. This is because of the full retirement age cutting your benefits by up to 70%.
Today, the FRA is 67 for most workers. You can choose to apply for Social Security benefits at the age of 62. When you do this, though, you can only get up to 75% of your benefits once you reach the FRA of 67.
This means that delaying your starting age is the best course of action for you. However, the age when you start should depend on your health.
If you expect to live a long and healthy life, there’s no harm in starting later. This ensures that you get the most out of your benefits. If your family has a history of illness that’s detrimental to people of age, though, consider investing in your benefits earlier.
If you’ve become disabled before you reach the FRA, though, you can claim your benefits earlier in full. Contact an SSD lawyer to help you claim your benefits if ever this happens to you.
2. Work a Bit Longer If You Must
Once you start with your benefits, it’s time to take a look at your career. Check to see if you’ve been working for at least 35 years before your application for benefits. This is because the benefits will get determined by your last 35 years of earnings.
This means that, if you haven’t worked for that long, your earnings will get listed to fill the gaps. Any zero on the list will impact what your benefits will be in the end. This is why it’s often better to apply for benefits once you have quite the career behind you.
If you’ve fulfilled the required 35 years, consider working a bit longer. With the time you’ve invested in a company, you’re sure to have a higher paycheck than when you started before. Continuing to work pushes out the lower-valued earnings you made beforehand.
The higher-valued earnings will replace them, causing you to have a higher payout from your benefits. This is a good idea if you’re still capable of working your job. There’s no reason to quit if you can still handle the workload.
3. Consider Taxes When Computing
One thing that people don’t know is that their benefits may become subject to federal tax. This often takes people by surprise as they see that their earnings aren’t as high as they thought it would be. While your benefits aren’t subject to tax on their own, they can be if you have other substantial sources of income.
These include investments and dividends. This makes it important to consult a tax advisor before you apply for benefits. They will explain in detail how your other income sources may affect your benefits.
This is important now more than ever since the Social Security tax will increase by 2021. You don’t want to give your hard-earned and long-awaited money to anyone but yourself, right?
4. Check Your Earnings Record Every Year
Once you create a Social Security account, you can check on your earnings record any time you want! This record shows how much you’ve earned through your job since you applied for a Social Security account. Check on it every year to verify that how much you earned is correct on the website.
Doing this is important because this will be the value your benefits will get determined by. If there’s an error, it can cause significant changes to your total earnings.
If you spot an error, it’s best that you report it. You can do this by filling out a Request for Correction of Earnings Record form and submitting it to the SSA. Give it some time, and the correction should be in place.
5. Delay Your Benefits
As mentioned above, your FRA will determine how much you get from your benefits. What most people don’t know is that the longer you delay getting your benefits, the more you can get.
Each month you delay your benefits from your FRA increases the value of your check. You can hold off on getting the check until you reach the age of 70. By this time, your check should be 124% of what it should have been if your FRA is 67 and 132% if your FRA is 66.
6. Remember to Claim Your Spouse’s Benefits
If you have a spouse, remember that you’re entitled to your own benefits or 50% of your spouse’s. The decision will lie on which value is higher.
If you’re divorced, though, you can still claim benefits based on the record of your ex-spouse. For this, you need to have been together for at least 10 years before. You should also remain unmarried to be able to lay a claim to their benefits.
7. Know That Your Income Affects Your Benefits
As mentioned above, working longer is a good option when receiving Social Security benefits. However, if you work too much, you will end up deducting from your own benefits. This will happen if you go over the IRS income limit for your FRA.
Learning about your income limit will help you keep a healthy work ethic while receiving benefits. It will save your total earnings at the end if you know how much you should only make.
Use These Social Security Tips Today
These Social Security tips will help you maximize the benefits you get. Use these tips and make the right decisions to get the most out of Social Security today!
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