7. Make Informed Choices About Social Security
Educate yourself about your Social Security benefits and claim them at the optimal time in order to maximize your income. If they are truly knowledgeable about Social Security benefits and their ins-and-outs, a financial professional can help you walk through different claiming strategies and timing.
Your full retirement age, as determined by the Social Security Administration, will have a big role in what your benefits are. If you claim your Social Security benefit before you have reached full retirement age, yes, you will start receiving payouts from the SSA sooner.
But the trade-off is your benefits will be permanently lowered from what they could have been at full retirement age or beyond. Then, if you wait past full retirement age to claim your benefit, your payouts will be higher. Each year that you delay taking your benefit past full retirement age, the more your benefit accrues.
The latest age that you can wait to claim Social Security is age 70. So, there is no benefit to waiting past that point. And, of course, waiting to take Social Security at full retirement age or beyond isn’t necessarily the right strategy for everyone, either.
The best timing and claiming strategy for you will depend on your personal situation and health status. A financial professional can help you weigh your options accordingly.
Be sure to weave these numbers into the rest of your financial plan. That way you know how your various streams of income may affect each other.