Strategies for Claiming Social SecuritySubmitted by Fiduciary First Advisors on February 25th, 2020
Many people look forward to their retirement for years. The best way to truly enjoy your retirement is by having a handle on your social security. Social security is a way to fund your life after your working days are over. Although social security is an important cornerstone of retirement, not many people have a good idea of how to claim it. Here are strategies for claiming social security:
Pay Attention to Timing
If you do not claim your social security correctly, you could be missing out on a lot of money. Timing is everything when it comes to the necessary steps for claiming your social security benefit. The Social Security Administration establishes a guideline that suggests that seniors not rely on Social Security benefits to replace more than 40% of their working wages come retirement. However, it has been discovered that there are seniors and pre-retirees are paying that aren’t taking this crucial advice.
Understand Full Retirement Age
In order to get the best out of your social security, it’s important for you to understand what the acronym FRA is. FRA stands for Full Retirement Age and marks the time you are able to receive 100% of your Social Security benefit. For example, for those born between 1943 and 1954, your FRA is 66 years of age. Every year you decide to wait to draw on social security between the age of 62 and your FRA, you will be gaining around 7% in monthly benefits. For every additional year after FRA, you will gain an extra 8% in benefits.
Whether You’re Single or Married
Claiming your social security is greatly determined by whether you are single or married. According to the Social Security Administration, Social Security benefits account for at least half of income for 50% of married couples. For married couples, they should definitely consider coordinating their claiming strategy. Depending on each of their life expectancies and how long they have been planning their retirement, there are different types of strategies to use. Some benefit from claiming early, while others benefit more from claiming later on.
In order to make retirement a breeze, prioritize your strategies and how you would like to claim your benefits. Weigh your options and see which strategy is best for you as an individual or as a married couple.