Social Security is expected to fill the income gap during retirement for many near-retirees.
However, retirement savings concern many Americans, and recent statistics underscore the importance of securing a comfortable financial future.
According to Northwestern Mutual, the average retirement savings balance for individuals of all age groups is $89,300.
While this figure may not be alarming for younger savers with decades ahead to grow their nest eggs, it paints a less-than-rosy picture for those in their 60s, who possess an average nest egg of just $112,500.
If you find yourself in this situation, maximizing your Social Security benefits becomes essential.
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Maximizing Your Social Security Benefits: Simple Steps for a Secure Retirement
Here are some simple steps to help you get the most out of your Social Security income:
1. Aim for a 35-Year Career: Your monthly Social Security benefit is calculated based on your 35 highest-earning years. Gaps in your work history can result in zeros in your benefits calculation.
Consider extending your career for a few more years, even if through part-time work, to achieve an entire 35-year work history.
This can significantly impact your monthly benefits.
2. Verify Your Earnings Record: The Social Security Administration (SSA) determines your monthly benefit based on your earnings history.
Errors in this record can lead to reduced benefits. Regularly review your Social Security earnings statements, accessible on the SSA’s website, to ensure accuracy.
If you spot discrepancies, such as underreported income, address them to secure a higher benefit once you retire.
3. Delay Filing Until Age 70: While you can claim full Social Security benefits at your full retirement age (FRA), delaying your filing until age 70 can substantially boost your monthly payments.
Each year you defer beyond FRA, your benefit increases by 8%. This can offset a smaller retirement savings balance.
In an ideal world, entering retirement with ample personal savings would alleviate concerns about Social Security income.
However, this is only the reality for some. Hence, optimizing Social Security benefits becomes a vital strategy for financial security during retirement.
Pay attention to the potential for a significant Social Security bonus, which many retirees miss.
Learning lesser-known “Social Security secrets” could increase your annual retirement income by as much as $21,756.
By implementing these strategies, you can achieve the peace of mind and financial stability required for a comfortable retirement.
It’s always possible to start planning and optimizing your Social Security benefits. Taking action today can lead to a more secure and enjoyable retirement tomorrow.
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Source: Newsbreak, The Motley Fool
