A key part of your retirement planning should be an understanding of your Social Security benefits. Around 90% of Americans over 65 collect Social Security retirement benefits, so they’re a big part of most Americans’ retirement planning. What you don’t know about Social Security could cost you a lot of money so it’s worth studying up now before it’s too late.
The Basics of Eligibility
To be eligible to collect Social Security retirement benefits, you need to be at least 62 years old. You’ll also need to have earned 40 Social Security “credits” to collect a benefit on your own work record and have worked at least ten years.
If your full retirement age is older than 65, you still will be able to take your benefits at age 62, but the reduction in your benefit amount will be greater than it is for people who were born before that age.
Spouses have a special rule for eligibility (see more below). If you didn’t work much (or at all) but your spouse did, you can collect a spousal benefit equal to half of your spouse’s full retirement benefit.
Calculating your Benefits
Social Security considers your entire work record, specifically, your lifetime earnings, up to the Social Security taxable maximum for each year, are indexed for inflation.
Morning Star‘s Mark Miller recently gave a super easy explanation of how your Social Security benefits are calculated…
“To determine your benefit amount, the SSA takes into account your 35 years of highest wages and translates this into something called the primary insurance amount,” he explains. “If you wait until the full retirement age of 66, you would receive 100 percent of the primary insurance amount. If you start at 62 (the earliest opportunity), you will receive a reduced benefit for the rest of your life — 25 percent lower. By waiting until after full retirement age (66), you would get the delayed retirement credit, which is 8 percent for each 12-month period that you delay. The credits are available until age 70.”
Try out the Social Security Calculator here.
What about Spouses and Ex-Spouses?
If you and your spouse both file for Social Security at full retirement age, each spouse is guaranteed a minimum of half of the other’s benefit. For example, if a retiree is entitled to a monthly benefit of $2,000, their spouse will receive at least $1,000, even if their own benefit amount would be much less.
But what about an ex-spouse? Here at CKS Summit Group, we constantly get asked “Can I claim SS on an ex-spouse?” the answer is YES (if you’ve been married at least ten years). Moreover, you can do this anonymously (watch ‘Can I really file for Social Security benefits on an ex spouse?‘ Money Clips for more on this).
2018’s $16,122 Social Security Bonus
A handful of little-known “Social Security secrets” could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $16,728 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after…
- While one small filing mistake could mean a 30% permanent cut to your benefits, another savvy move could line your pockets with an extra $16,122 every year.
- There’s a weird little loophole that lets you get a one-year, interest-free loan. That’s not just easy money – It’s free money!
- If filed correctly, married couples could be eligible for free extra Social Security payments too.
Understanding your Social Security benefits can be an overwhelming task. While we’ve only scratched the surface in this article, CKS Summit Group believe that after years of paying into the SS system, you deserve clear answers about your retirement money and how to maximize these benefits.
Get the answers you need and the advice you can trust from the experts at CKS. To create your own personalized Retirement Income Plan, click here to schedule your strategy session. You can also give us a call on 586-286-5820.
