5 Facts About Increasing Social Security Benefits
The Social Security Administration believes that social security benefits account for 90% of income in approximately 21% of married seniors. This estimate increases to 44% when considering single seniors. Even with other retirement funds, social security income can have a significant impact on the quality of life in retirement and in covering increasing medical costs.
Whether you are planning for yourself or helping a parent or relative navigate the decision on when to collect, here are 5 facts that may impact your decision.
- If you wait until full retirement age then your benefits will not be adjusted due to employment wages. If you are planning to collect social security before you reach full retirement age you are going to receive a reduced benefit that is calculated based on your age and the amount of earnings over the predetermined wage threshold.
- Your benefit amount is determined based on the highest 35 years of earnings. If you can work an extra year or two, you could potentially increase your benefit by knocking some lower earning years out of the calculation.
- Spousal benefits can be a planning tool. You may be able to collect on a spousal benefit while letting your individual benefit mature.
- If you are currently divorced but were married for 10 years or more you may be able to increase your social security benefit if your ex-spouse’s is higher.
- If you realize you took benefits too early, it can be undone in the first 12 months with approval of the Social Security Administration. You would need to repay what you received but your benefits would continue to increase.
The Social Security Administration provides many online tools that can be found here: https://www.ssa.gov/planners/calculators/.
If you need help with determining when to collect social security or are looking for assistance with planning for retirement, please contact an Innovative CPA Group professional at 203-489-0612 or contact us online.