Taking advantage of Social Security benefits will help you stretch your payments even further. The Social Security Administration serves roughly 69 million Americans, the majority of whom are older citizens and/or retirees. The average Social Security payment made to beneficiaries is just under $2,000 per month. However, these payments are frequently insufficient to support users’ basic needs. Here are seven Social Security secrets you may not know that will help you stretch your payouts longer.
Be informed of ways to maximise your Social Security payments
When it comes to programs like Social Security, there are frequently critical pieces of information that you may be unaware of regarding how to maximise benefits. This is especially true if your marital status changes, you choose to collect your benefits early, or you become widowed. While the payments are basic, lifestyle changes and decisions like these affect your benefits.
Being aware of how to maximise your income from any source is critical not just to ensuring you receive what you are entitled to, but it can also be beneficial tax-wise. Many people with investment income and other assets, for example, are unaware of the numerous ways they can structure or report that income to reduce their tax liability, maximise deductions, and take advantage of available credits or deferrals that can significantly improve their overall financial situation.
Top two most surprising Social Security truths
To begin, did you realise that even if you are divorced, you may still benefit from and be entitled to your former spouse’s Social Security benefits? Social Security spousal payments are eligible after 10 years of marriage, and this regulation applies even if you and your spouse divorce, as long as you were married for at least ten years. You can still receive spousal benefits equal to up to half of your former spouse’s benefits.
The second most startling fact regarding Social Security benefits is that you can change your choice to claim your benefits during the first year of claiming. If you chose to claim your benefits sooner but then decided to wait, you can do so as long as you repay any benefits received, including spousal and child benefits.
Additional Social Security Secrets to Improve Your Financial Security
In addition to these two security secrets, here are five more you might not know about:
- Children under the age of 18 are eligible for survivor benefits.
- You can continue working while collecting benefits before the full retirement age, as long as you do not earn more than $23,400.
- While the Administration frequently encourages you to wait as long as possible before filing a claim, once you reach the full retirement age, you receive no more benefits.
- Roth IRA distributions do not count towards federal Social Security taxes, while withdrawals from 401(k), traditional IRAs, and other tax-deferred accounts do.
- When using an online Social Security calculator estimate, keep in mind that spousal, divorcee, child, mother, father, widow, or widower benefits, as well as file and suspend choices, are not included.
Understanding lesser-known facts regarding your Social Security payments will help you obtain the most money possible during your retirement. However, when preparing for retirement, you should not rely just on Social Security. Make sure to develop an extensive and diverse income strategy that pulls from a range of sources, so that you can retire comfortably.
