Social Security 2024: 10 Savings Tips Americans Are Not Taking Advantage Of
Written by
Sean Fisher, AI Editor
Edited by
Sean Fisher
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Social Security is a crucial part of many Americans’ retirement plans. As we step into 2024, it’s essential to maximize your Social Security benefits with smart saving strategies. Here are ten savings tips that are often overlooked but can make a significant difference in your financial health.
Delay Claiming Benefits
You can start receiving Social Security benefits at 62, but waiting until your full retirement age (67 for most people) can increase your monthly payments. If you can afford to wait, even until 70, your benefits will grow each year you delay.
Maximize Your Earnings Record
Your benefit is calculated based on your 35 highest-earning years. Working longer, especially if your current income is higher than in previous years, can increase your average earnings and, consequently, your benefits.
Check Your Earnings Record Regularly
Mistakes in your earnings record can reduce your benefits. Regularly review your Social Security statement to ensure accuracy and report any discrepancies immediately.
Understand Spousal Benefits
Spouses are entitled to benefits, even if they have never worked. Understand the rules around spousal benefits, as they can significantly boost your household income in retirement.
Consider Survivor Benefits
Widows and widowers are entitled to survivor benefits, which can be higher than their own. It’s essential to understand how these benefits work and the best time to claim them.
Minimize Social Security Taxes
Up to 85% of your benefits can be taxable depending on your income level. Consider strategies to minimize your income in retirement, such as drawing from Roth IRAs, which are not considered taxable income.
Work At Least 35 Years
If you have less than 35 years of earnings, zeros are averaged into your benefit calculation, reducing your payout. Aim for at least 35 years of work to maximize your benefits.
Factor in Government Pensions
If you receive a government pension from a job not covered by Social Security, it can affect your benefits. The Windfall Elimination Provision and Government Pension Offset can reduce your Social Security benefits, so plan accordingly.
Understand the Earnings Test
If you claim benefits before full retirement age and continue to work, your benefits may be temporarily reduced based on your earnings. Knowing these rules can help you plan your work and benefits strategy.
Regularly Update Your Retirement Strategy
Your needs and circumstances can change. Regularly reviewing and adjusting your retirement strategy, including your Social Security claiming decision, can help you stay on track for a comfortable retirement.
By being proactive and informed about Social Security, you can significantly enhance your financial stability in retirement. Remember, every individual’s situation is different, so consider consulting a financial advisor for personalized advice.
Editor's note: This article was produced via automated technology and then fine-tuned and verified for accuracy by a member of GOBankingRates' editorial team.
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