1. Check your earnings record
Since this information will be used to calculate your benefits, verify that all your earnings have been credited correctly on your Social Security earnings record.
2. Consider delaying your claim
Every year you delay claiming past age 62, your benefit will increase until it maxes out at age 70. This sets the base for the benefits you’ll receive for the remainder of your life. Note, your full retirement age (FRA) depends on your birth year.
For those born between 1943-1954, claiming at age 62 results in an approximately 25% reduction in your benefit versus claiming at your FRA of 66 (100%), while waiting until age 70 increases your benefit by nearly 32%.
3. Work longer – even for a year or two
Your benefits are based on your top 35 years of earnings. If you have worked less than that, a zero will be assigned to any non-earning years.
Consider working longer to negate any zeros or to take further advantage of top earning years if you find yourself in them. Both can help increase your benefits for life.
4. Claim spousal benefits
If married, you are entitled to the higher of your own benefits or 50% of your spouse’s benefits at FRA.
5. Don’t forget about your ex-spouse
If you were married for at least 10 years and have not remarried, you might profit by claiming benefits based on your ex-spouse’s earnings record. To do so, your benefits must be less than what you would receive from your ex-spouse’s earnings record and you must be at least age 62.
6. Understand the impact of earned income
If you work while receiving Social Security benefits and earn over the IRS income limit prior to reaching your FRA, your benefit will be reduced by $1 for every $2 earned over the limit. Note, your benefits will be recalculated when you reach your FRA.
7. Avoid or minimize taxes
A portion of your Social Security benefits may be subject to federal income taxes if you have substantial income from other sources (i.e., wages, interest, dividends), in addition to your benefits. Keep an eye on your provisional income and earnings limits and consult your tax advisor.
Contact Us Today
Everyone’s situation is unique and there are many factors (i.e., your savings, health, expected longevity, income need, etc.) to consider when determining what role Social Security will play in your retirement income strategy.
Contact a PNC Investments Financial Advisor who can help you navigate your options and develop a customized retirement plan that accounts for all your income sources. Call 855-PNC-INVEST or stop by your local branch today.