We assist clients who are concerned about the eventualities of aging, so we provide retirement planning services along with our elder law and estate planning assistance. Social Security is going to be important for most seniors, so you should understand how you can maximize your benefit.
Before we get into the details, we should point out the fact that it is important to understand the limitations of the Social Security program. The average benefit in 2015 is just $1328, and the maximum benefit is a relatively modest $2663 a month. When you consider these figures, you can see why you should develop a retirement nest egg, and additional income sources can also be quite useful.
There are three different approaches that you can take to Social Security eligibility. It is possible to accept an early benefit when you are as young as 62 years of age. This can sound enticing, but your early benefit would be between 30 and 35 percent less than your full benefit. The exact amount of the reduction would depend upon the year of your birth.
The age of full benefit eligibility also depends upon your birth year. For people born between 1943 and 1954, the age of full eligibility is 66. The full eligibility age then rises by two months for each year, so someone born in 1955 would become eligible two months after his or her 66th birthday.
This two months per year arrangement goes up until 1960, when it maxes out at 67. Anyone who was born in 1960 or after becomes eligible for a full benefit at the age of 67 under currently existing laws.
Once you become eligible for a full benefit, you can work and earn any amount of money without experiencing a reduction in your benefit. There is a limit on penalty free earnings if you take a reduced benefit before you reach your full retirement age.
To truly maximize your benefit, you could choose to delay the submission of your application beyond your age of full eligibility. If you do this, you earn retirement credits. Each year that you delay the submission of your application, your benefit will increase by eight percent, but you cannot earn delayed retirement credits after you reach the age of 70.
As a result, there is no reason to delay the submission of your application once you reach this age.
Delaying your application submission can increase your benefit in another way. Your benefit is calculated based on your highest 35 earning years. So, if you are earning more during these final working years than you did when you were younger, your benefit would increase on that level as well.
Retirement Planning Consultation
Your retirement years can be among the best years of your life if you plan ahead effectively. If you would like to discuss retirement planning strategies with a licensed professional, contact us through this page to set up an appointment: Hartford CT Retirement Planning Attorneys.