Maximizing Your Social Security BenefitsSubmitted by KWB Wealth Managers on June 28th, 2018
Maximizing Your Social Security Benefits
Retirement and Social Security are inextricably linked. Not only did Social Security help establish the official U.S. retirement age at 65, it also provides a significant portion of today’s retirees’ incomes.
Some of the earliest company pension programs began paying benefits at age 65. The economics made sense since life expectancy for a 30-year-old at the turn of the century was about 65 years. When the U.S. government was working through the economics of old-age insurance (a.k.a. Social Security), it came to the same economic conclusion, and age 65 became our official ‘retirement age’.
The Social Security program has evolved over time and, today, Americans may retire and begin receiving benefits as early as age 62. For people with average earnings, Social Security retirement benefits replace about 40 percent of pre-retirement income. If you earn more than average, benefits replace a smaller portion of income.
No matter how much you earned during your working years, it’s important to understand the attributes of the Social Security program so you can maximize your benefits. However, it’s not an easy task. CNBC reported, “A single person only has to consider nine different scenarios when claiming retirement benefits. For married couples, the available options for filing strategies grow to 81.”
Often, maximizing your benefits means working with a qualified financial professional who has the knowledge and experience to help determine which options may be most beneficial for you.
For many people, Social Security benefits are determined by the amount of income earned while working. Americans can choose when to retire and that affects benefit amounts, too. For example:
- Early retirement: A person can choose to begin receiving benefits as early as age 62. However, taking early retirement may reduce monthly benefits by as much as 30 percent.
- Normal retirement: If the individual waits until full retirement age (FRA), he or she can expect to receive a full retirement benefit. FRA is about 66 for people born 1943-1954 and about age 67 for people born 1960 or later.
- Delayed retirement: If a person retires after normal retirement age, he or she may receive credits for each year of delay up to age 69, increasing the amount of the benefit.
Of course, it is possible for people who have not worked to receive Social Security benefits, too.
- Spousal benefits: It’s important to calculate spousal benefits before choosing your Social Security benefit. Many factors can affect spousal benefits. In broad terms, people who have been married for at least 10 consecutive years may choose a benefit based on personal earnings or claim half of a spouse or ex-spouse's benefits.
- Survivor benefits: Your spouse and dependents may continue to receive Social Security benefits after your death. The number of dependents and the earnings of the person who died typically determine the amount received.
When To Talk With a Financial Professional?
If you are approaching retirement age, consider the Wealth Managers at KWB Wealth Managers Group. Our Social Security professional, Mike Razzouk, has been helping clients maximize their benefits and choosing collection strategies that incorporate all important aspects of life for over 10 years. Give us a call at (909) 307-8220 or schedule a complimentary consultation today!
Mike Razzouk, M.B.A., AIF
KWB Executive Wealth Manager
LPL Registered Representative
The Wealth Managers of KWB Wealth Managers Group (KWB) are registered representatives with and securities and advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC. The third-party firms and their respective websites provided are neither endorsed by nor affiliated with LPL Financial.
2 https://www.ssa.gov/oact/NOTES/pdf_studies/study120.pdf (Pages 162-164)
8 https://www.ssa.gov/planners/retire/retirechart.html (To view the chart, go to https://s3-us-west-2.amazonaws.com/peakcontent/Peak+Documents/Nov_2017_SSA-Age_to_Receive_Full_Social_Security_Benefits.pdf)