Think you’re too young to be thinking about Social Security Benefits? Wrong – your Social Security benefit is one of your most valuable financial assets, and it must be managed.
Get it wrong – and you can cost yourself well over $100,000 in lifetime benefits. Here are five ideas:
- Your benefit is based on your 35 highest earning years. So it may make sense to work another year or two so some of those low-wage burger-flipping years fall out of the calculation.
- Learn about two extremely important filing options; “file and suspend” and “file restricted.” Each can significantly enhance your lifetime benefit.
- Full Retirement Age for most people is 66. File before that – and your benefit can be reduced by as much as 30%. However Uncle Sam will increase your benefit by 8% each year you wait between 66 and 70.
- Couples have 81 different possible filing combinations, and only one will maximize your outcome. Have a retirement income-planning expert pinpoint your sweet spot.
- Up to 85% of your benefits can be taxed based on your “other” income. The taxable threshold is shockingly low – $32,000 for couples. For most, that means interest, dividends, pensions, and earnings on investment assets. Consider moving money into cash-value life insurance for example. You get the double benefit of drawing tax-free income from it – and protect your SSI benefit from tax exposure. But you have to plan ahead.
Start planning at age 50. Find a good advisor who will help you navigate your personal finances to yield the greatest benefit using these strategies and others.