(DailyVibe.com) – One of the looming concerns during the average person’s working life is ensuring they have enough to retire comfortably. And as retirement approaches, deciding the best way to claim your retirement benefits becomes a looming concern.
There are no hard and fast rules to boost how much you get, and the circumstances vary from person to person. But you can make better choices by understanding some primary determinants.
For instance, you, not The Social Security Administration (SSA), control how long you work and when to start claiming your benefits. However, you can’t control your birth year, but it determines your full retirement age, and these factors combined determine your benefits.
Here are eight hacks to help you get the best from the social security coffers.
Put the Bulk of your Savings in a Roth IRA Account
A Roth IRA account is uniquely designed to enable you to grow your retirement savings without incurring taxes if you stick to particular guidelines –for example, not making any withdrawals before age 59 and a 1/2.
Ideally, you pay taxes on your contributions in the year you make them, but your withdrawals will be tax-exempt after you retire. Also, because your Roth IRA withdrawals don’t contribute to your taxable income, a Roth IRA account reduces potential taxes on your Social Security benefits.
It is also the only account that doesn’t attract required minimum distributions (RMD) regardless of how old you get. An RMD refers to the least amount of money you’re required to withdraw each year from your qualified retirement plans after 72.
Work for More Than 35 Years
The amount of your monthly social security benefits is determined by 35 years of your most financially productive working life.
Assuming that your pay gets better with time –as is the case for many people –you can gain bigger benefits by extending your stay at the job. Every year you work on a bigger paycheck pushes out one more year when you don’t make much. Therefore, your average earnings over your career will be more, consequently boosting your retirement benefits. Extending your job also means you can comfortably wait longer to claim benefits.
Delay Retirement to Get Higher Benefits
You can get much more if you choose to take your benefits at age 70 than 62. Depending on your birth year, taking the benefits at age 62 reduces them by up to 30%, according to the fund. Worse, if you’re claiming early and under your spouse’s work record, the benefits could be slashed by up to 35%.
There’s even more to gain if you push it beyond age 70. Every year after that increases your benefit by as much as 5.5 to 8% per year. However, consider your health and other needs and sign up for Medicare when you reach 65.
Consider Claiming Under your Spouse’s Work Record
In some instances, you can get higher retirement benefits under your spouse’s work record. For example, if you only worked for ten years and became a stay-at-home parent, your contributions to social security may be a little -but you can get higher benefits from your partner’s work record.
In such cases, the SSA pays out your own benefit first and follows it up with more payments until you reach the spouse’s higher benefit level.
If you were birth year is 1953 or earlier, you’re also entitled to claim a restricted benefit under your spouse’s record when you clock full retirement, and you can claim your benefits under your work record when you turn 70.
Apply for Social Security Survivor Benefits
If you are a widow or widower and your late spouse’s benefits exceed yours, you can claim their benefits. This approach works better when the partner who earns higher waits longer to claim their benefits to set up their lower-earning spouse for bigger retirement benefit checks.
While spousal benefits are determined by the unadjusted Primary Insurance Amount (PIA) and when the nonworking partner chooses to start earning, survivor benefits depend on how much the working spouse received if they die after starting benefits.
PIA is the benefit you receive when you choose to start claiming your benefits at your normal retirement age. In this case, the benefit cannot be reduced or increased.
Don’t Exceed the Yearly Earnings Limit
If you register for Social Security before your full retirement age and continue working, the SSA will withhold part of your benefits. The authority withholds a dollar for every two dollars earned above the limit by people who make more than $21,240 in 2023.
In the year you reach full retirement age, the body will keep a dollar in benefits for every three dollars you earn above a different limit. That limit is $56,520 in 2023.
Use Qualified Charitable Distributions for Required Minimum Distributions
Using a qualified charitable distribution (QCD) to contribute money to charity while receiving your benefits can help cut back on the income taxes that your benefits attract.
This is because QCDs enables you to donate your RMD from your IRA directly to a charity, preventing it from qualifying as taxable income. All you have to do is ask the organization hosting your IRA to pay the donations directly to the charity.
By contrast, if you get the benefit and then transfer some of the cash to a charity, you will increase your combined income.
Receive a Dependent Benefit
Say you are a retiree but still have dependents younger than 19. These dependents have a right to up to half of your benefits as long as they are not married, are full-time high school students, or have a severe disability before they turn 22. However, this doesn’t interfere with the amount you can receive but is included in the amount the family gets.
Considering the increased lifespan among Americans, increasing your social security benefits is one of the best ways to protect your financial independence in your sunset years. Plus, Social Security is the only 8% guaranteed investment in the country and is more secure because it is backed by the federal government.
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