Social Security Benefits - How to Maximize
All of the information in this article is based on the data at the government’s
social security web site www.ssa.gov effective for 2007. But rather
than repeat the rules, we show you how to USE the rules in plain English to
maximize your social security benefits coming to you. Any figures change
annually so consult the government’s web site for 2008 and later. We
answer 5 questions for you:
- Can you do anything to potentially increase your social security check
before you retire?
- At what age is it best to start social security?
- How can married couples help maximize the joint benefits?
- What methods are available to reduce or avoid tax on your social security
benefits?
- How can you earn money and still collect social security benefits?
Coming Up on Retirement
You may have a simple question like, “What can I do now to get the
biggest social security benefit?” The answer is not much. Your
social security benefit is based on your 35 highest years of income. So
even if you have a couple of “break-the-bank” years of earnings
just before you retire, it won’t have much impact on your social security
check for two reasons:
- Each of the 35 years gets an equal weighting so 2 years out of 35 (2/35)
could only impact what would be for example, a $1300 monthly check by $74.
- High earning years have a minimal impact because of the 420 months in
the calculation (12 months x 35 years), the first $656 you earned in a month
count six times as much as the monthly earnings over $3955
(these are 2007 inflation adjusted figures). And annual earnings over $97,500
won’t help you at all.
To increase the size of your social security benefit, the only option is
to delay your starting date as explained in the next article:
Social
Security Income - When to Start Your Benefits
|
