Know It Well

Important things to know about Social Security benefits

There’s a good chance you’ll rely on Social Security benefits during retirement. Hopefully the payments will be merely a nice added bonus on top of your savings. Or maybe Social Security will provide more than that as it does for many, many people. No matter how Social Security impacts your retirement, here are some things you should know before it’s time to claim your benefits.

You Want To Max It

According to a report from Nationwide, 92 percent of Americans could not identify factors that allow them to maximize their Social Security payments. That’s not good. You don’t want to leave money on the table. Here are a couple ways to maximize your benefits:

  • Work 35 years or more. As USA Today notes, your benefits are based on the highest wages you earned during 35 years of work. If you don’t work for at least 35 years, your benefits will be smaller.
  • Make a plan. Make sure you and your partner are on the same page when it comes to benefits. If your partner claims spousal benefits based on your work history, you must claim them first. However, if that means claiming benefits early, you’ll miss out on bigger payments. Talk with your partner so you have a plan in place.
  • It Pays to Wait

    You want to wait until at least your Full Retirement Age (FRA) to claim benefits. If you claim benefits prior to your FRA, you’ll pay a fee and your checks will be smaller. For most people, FRA is right around 66 years old. If you can wait even longer to take benefits, your payments will increase until you reach 70 years old.

    Payments Don’t Go Up

    If you file for benefits before your FRA, your checks will not increase once you reach that age. This is why FRA is so important. Waiting really does pay.

    Chris O'Shea