How Can I Increase My Social Security Benefits, Are you seeking an extra income source? Then, you have reached your destination. Here, you are going to know about the Social Security payment that you can consider as an additional source of income that will benefit you a lot. At the time of the introduction of Social Security in 1935, it was never envisioned to be a major source of income that could assist people even in their retirement age.
Instead, the major goal of Social Security was to give a safeguarded way to people who were not capable of gathering enough retirement funds as a part of saving.
At that time, most Americans never considered Social Security due to shorter lifespans and the dependency on assured pensions. However, these days, a million people in the USA have taken the Social Security benefits into account as they have become aware of it.
How Can I Increase My Social Security Benefits
How Can You Boost Your Social Security benefits?
When it comes to taking complete advantage of Social Security, it is important to have proper planning. Without planning, people cannot secure lifetime income adequacy. At the same time, the experts also reveal that longevity is more essential than ever so that people can maximize the Social Security advantage in any manner. Thinking of Social Security as an allowance for your entire life is an ideal thing.
Go with the proper planning
The major fact to know about Social Security is that it is just an 8% assured investment around and it is also backed by the federal government. When you are going to plan for availing the benefits of Social Security, there are lots of things that can make the advantages reach the optimal stage. The below-mentioned tips and tricks will help you in accelerating the size of the Social Security check to a great extent.
Must Read: How Couples Can Get Benefit From The Social Security?
Max out paychecks via full retirement age
According to the Social Security Administration, they calculate the benefit in the form of the amount that is dependent on the paychecks. It means that the higher you earn, the more your benefit amount will be. If the earnings are above the yearly cap, they are remained out of the calculation.
The tip here is to maximize the peak earning years, which struggle to earn that reaches the cap level or higher than this. People, who are not retired yet, seek ways to boost their income by taking part in part-time work or having a side business. But they are not aware of the impact of these things on their income, this may reduce their income that comes from Social Security.
Get indulged in the work for full 35 years
Make sure that you have covered all the basics of Social Security prior to thinking about taking the benefits into account. It is also an essential thing to know that the SSA has a criterion to calculate the final benefit amount according to lifetime earnings. It covers your highest 35 years of history related to your work.
They sum up the earnings of your greatest thirty-five years and averages by making use of an AIME (Average Indexed Monthly Earnings) formula. In any case, if you started the job late or suffered from unemployment, there is nothing to count them. This period seems to be zero.
According to the formula, it brings down the average because of zero counts. If you work 35 years, then each extra year of earnings will replicate an earlier year of lower earnings. This will impact the average by increasing it.
Must Read: Social Security: A Great Tool for Your Whole Life!
Get the spousal benefits and make sure to delay yours
It is one of the most effective and reliable ways of adding an extra advantage to your Social Security amount. In this case, if you and your partner were born in the year 1953 or earlier and have both entered the full retirement age, it is a wise idea to claim the benefits of your spouse and allow your own Social Security benefits to keep increasing.
Once you enter the age of the 70s, it is the right time to switch to your greater benefit. There is one important thing you need to note is that you cannot have appealed your own advantage in any situation if you are willing to use it. This is why it is called a restricted application if you opt for spousal benefits to be claimed.
Delay Social Security benefits
The next option you can use is to delay the benefits. It is a tendency that most USA citizens are familiar with their full retirement age or simply FRA. The FRA is the Social Security age at which you can receive complete benefits. Until you reach FRA and you are delaying the benefits, you can earn an 8 percent return yearly on your available benefits.
It states that the amount of the benefit boosts by 8 percent every year that it is delayed until the age of 70 years. It is being done according to the DRCs (Delayed Retirement Credits) obtained for every year that you delay your benefits of SS.
Neglect Social Security Tax
A tax also plays a great role in receiving the complete benefits of Social Security. In order to add a greater amount to your retirement income, then the tax consequences should be known. You must be familiar with the fact that anywhere that ranges from 50-80 % of your Social Security benefit amount can be subject to Federal taxes.
There is a proper strategy to calculate your tax on Social Security benefits. For that reason, the Internal Revenue Service will supplement your non-taxable interest and also half of the SS income to your AGI or Adjusted Gross Income.
If you are capable of avoiding paying the tax on your SS income, then you can really benefit your SS amount in a positive and effective manner. You can consider ways to spread out the income from several sources that may not promote a higher tax.