Maximize your social security benefits!

Maximize your social security benefits!

The amount of social security you receive is based on your total lifetime earnings that were subject to Social Security taxes. So, the more money you make over your active years, the more you receive when you retire. Plus, check out if your retirement plan is definitely on track!

The retirement benefit paid to a beneficiary is based on the result of this SSA Calculation. This calculation is based on a persons’s top 35 years of earnings, adjusted for inflation. The age in which you start claiming for that benefit also plays a part: the maximum payment for a person who starts getting it at full retirement age is $2,642 per month.

You can estimate your future benefit with this useful resource provided by the SSA. 

There are different options as to when to start withdrawing your benefits. The original Social Security Program established 65 as retirement age in which people could start receiving benefits, but in 1983, Congress passed a Social Security amendment that gradually raised the age to 67, so if you were born after 1960, you must reach that age to collect your full benefit.

However, the program offers an early retirement option, beginning one month before you turn 62, provided that you have a minimum of 40 work credits (the amount of money a credit is worth is adjusted annually).

If you choose to retire early, your benefit amount is reduced according to these parameters:

- Up to 36 months early: payment amount is reduced 0.00555% for each month before your regular retirement age. For example, if you were entitled to receive a $1,000 monthly benefit at full age, and decided to retire 12 months early, you would receive $933 (1,000 x 12 x 0.00555).

- Between 37 and 60 months early: In addition to the above, benefits would be further reduced by 0.00417% for each month over 36. Following the same example: if you are entitled to a $1,000, but start taking payments 48 months prior to your regular retirement age, you would get $750 (1,000 x 36 x 0.00555) (1,000 x 12 x 0.000417).

To maximize the total benefit paid over your retirement years, decide when to begin withdrawing Social Security payments. You can base your decision on this information, knowing that the sooner you start getting the payments, the more the benefit is reduced.

Also, you need to consider taxation. As this is usually something tricky, you can follow the instructions of the IRS Publication 915. 


You know how much money you are putting in your retirement fund and, if you are enjoying of a 401(k) employer matching contribution program, you also know how much your employer is putting in, but as you keep doing this for many years, it is always a good idea to check regularly how the fund is doing.

The reason why it is important to make a habit out of checking your retirement account is because sometimes there might be hidden fees affecting your investments, or there might be an opportunity that you are missing. Fortunately, there is a way for you to take control of the situation: Blooom.

This platform Works with 401(k), IRAs and more and it’s a quick way to see how your savings are doing. You will need to answer a few questions about your investment habits, create a user and log in with the existing savings account.

You will see where you are investing at the moment and what other opportunities to take into account are. They will do some research on diversification, identifying which funds are available to you and give you a quick feedback with all this information, presented in different ways.

So if you are into numbers, you can get a graphic chart showing exactly how your portfolio is doing. If not, you can visualize in a very simple yet effective way: a flower with different stages of health depending on your portfolio general performance.

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