Social security has received a bad rep over the years with people predicting that it will run out of money by 2034. There are also a lot of skeptical people wondering why welfare never seems to run out.
What will happen is anyone’s guess, but the U.S. government will probably give you your money. They’re already printing trillions of dollars these days without a care in the world anyway.
The truth of the matter is that social security is a means to an end and not an end in itself. You should never look at social security as the be-all and end-all of retirement planning.
In fact, social security was created to serve as a safety net for individuals who did not save for retirement. You’ll have some money there, but you can rest assured that you’d be far better off focusing on saving money on your own and investing rather than just depending on social security.
In this article, you’ll find 5 tips to boost your social security. Apply them wisely.
- Delay withdrawal
One of the best things you can do will be to delay withdrawal. Your monthly payments will be much higher if you start taking your money out of social security after the age of 70.
If you decide to retire at 60, that will mean waiting 10 years. This is why one of the most basic retirement planning goals is to save 10X your annual income. It’ll help you keep going until 70 when you can touch your social security for higher payouts.
- Plan your social security survivor benefits
Like the saying goes, “Nothing in life is certain but death and taxes.”
If you’re married, you must make plans to maximize your social security benefits should your spouse die and vice versa.
You’ll have a few choices here:
- The spouse who earns less retires first and takes his/her benefits
- The spouse who earns more retires first and increases the lower-earning spouse’s benefits
- Claim your social security but suspend receipt of them
Which way you go will depend on your situation. You may wish to speak to a financial advisor to guide you here.
- Avoid social security tax
Social security income is subject to taxes, but not all states impose this tax. So, you may wish to move to a state that doesn’t tax your social security.
- Work for 35 years
This is a common tip that most financial advisors will tell you – work the full 35 years. The more you earn, the higher your social security will be. That’s because it’s calculated based on the average of your 35 highest-earning years.
If there are years where you are unemployed, those zeroes will be added to the total and when averaged, you’ll get a smaller amount.
- Monitor your account
You’ll want to keep track of how much social security you have. Look out for any errors that may appear in your yearly social security statement and rectify them.
Since social security is based on the average of the 35 years you’ve worked, any error can have an adverse effect on your payouts.
These are just some of the ways to boost your social security benefits. Hire a professional financial advisor to guide you on optimizing your social security.
He/she will be able to tell you what benefits you qualify for, how to reduce taxes, receive dependent benefits, how to suspend monthly payments and so on. The advice you get from an expert will be very useful. Finally, always remember that social security is only a safety net. Always save money on your own and invest whatever you can to grow your money. Your efforts will yield more rewards than social security ever will.