Social Security, even if you’re a six-figure earner with additional retirement savings outside of Social Security, is a significant portion of your retirement income.
After all, you’ve been putting money into the fund for the majority of your working career. If you’re making more than $147,000 this year, you’ll be contributing more to the Social Security fund than ever before.
When should a high-earner start collecting Social Security benefits in order to get the most out of them?
To begin, keep in mind that the amount of money you receive from Social Security will not necessarily increase if you continue to work longer. The amount you’ll receive is determined by the 35 years during which you made the most money.
Since your earning power has been maximized, you aren’t increasing your Social Security payments by delaying collecting benefits if you’ve taken a lower-paying job or even worked part-time as you neared retirement.
You can maximize your Social Security benefits by extending your life expectancy and taking full advantage of your full retirement age benefits as soon as they are available.
The age at which you are eligible for full retirement depends on when you were born. The full retirement age for those born after 1960 is 67 years old.
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Social Security benefits should be started at 67 or full retirement age for the majority of people. However, there are a few other things to keep in mind as well.
Taking Social Security early is the best way to maximize your benefits if you live to a normal lifespan, according to Matt Dixon, CEO and financial planner at TruNorth Advisor. When planning for retirement, Dixon advised checking your Social Security benefits at SSA.gov to see how much you will receive.
Then add up all of your retirement income, including Social Security, withdrawals from IRAs and 401(k)s, pensions, and investment income, to arrive at your final retirement income.
Also Read: Social Security Column: Representative Payees Assist You with The Administration of Your Social Security Benefits.
If you don’t take advantage of your Social Security benefits, you’ll lose them. As a result, Dixon believes it may make sense to spend your Social Security first.
Make the most of your other retirement funds so that you can enjoy your golden years. It’s also important to remember that you can give your heirs a head start on their financial future by passing on your other investment money or even donating it to a favorite charitable organization after your death.