For many seniors, social security is the main factor in their retirement income. All your retirement dreams are based on your social security and how you maximize it. The rules for claiming social security benefits can be complex, however, understanding social security will enable you to claim the maximum benefits to which you are entitled.
• Full Retirement Age – The age at which social security is claimed plays a pivotal role in the money you receive. Although you can claim social security when you turn 62, you should always consider waiting till you reach full retirement age. For example, if you were born between 1943 and 1954, your full retirement age is 66. Your benefits can reduce by 25% if you don’t wait till your full retirement age
• Earning Credits – At least 40 credits need to be earned to be eligible for social security. You earn approximately 4 credits a year. So, if you do the math, you need ten years to qualify for social security. Plus, your social security benefits are based on the 35 years where you earned the most money. If you have less than this, you can make up for it by working longer.
• Cost of Living Adjustment – Social security benefits are automatically adjusted for inflation. This is excellent news, as this helps you get over the rising cost of living during retirement.
• Spousal Benefit – Being married is advantageous when it comes to social security. Why? Because a spouse can claim up to 50% of the other’s benefit. This is referred to as spousal benefit. This is advantageous as it brings in extra money. However, keep in mind that claiming spousal benefits before the full retirement age means you cannot claim up to 50%.
• Survivor Benefit – You can claim 100% of your spouse’s benefit upon his/her death if you wait till full retirement age. This is not possible if you remarry before 60 but is possible if you remarry after 60.
• Bonus for Delaying Claim – If you wait to claim your benefit, even after full retirement age, your benefit will grow by 8% until 70. This does not include spousal benefits but does include survivor benefits.
These are just some of the things to know about social security. You should always speak with a professional and obtain his/her advice before claiming social security benefits.
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