Are you approaching retirement? If yes, then now's a good time to know how to increase your social security benefits. Some strategies that are not well-known can boost your household's benefits, whether you still have minor children at home or live alone.
Don't Go Straight To SSA
It always seems like the best way to go straight to the source and get accurate information like what is the best time to file for Social Security. However, it's not the case.
The Social Security Administration (SSA) representative you go to might have pure intentions when he/she offers you advice about your circumstances. But, SSAs are undertrained and overworked, and chances are they may give you incorrect information. Wrong information can cost you a lot of money.
If the mistake is discovered at a later stage, you might not be able to correct it. It doesn't matter if it was SSA's fault; you will have to pay for it. It's the rule of SSA, and many claiming decisions are irreversible.
Even if you do go to SSA, be wise, and choose an attorney who specializes in retirement planning.
Withdraw Your Application
Want to reverse a claiming decision you regret? Do you have enough cash? You can do that if you're within the first 12 months of claiming. You can withdraw your application and repay all the benefits you've received.
If you do so, it's like you never claimed anything in the first place. Many people file for social security without fully understanding it, they claim it before the full retirement age, and afterward, they regret doing so. After you are done repaying, you can claim a tax refund you paid on those benefits.
Increase Your Household Benefits
Before claiming, you should analyze how your claiming strategy affects your spouse and minor children. It might mean using a different benefit strategy other than the one you intend to utilize to maximize your benefit payment. To maximize your household benefits, you often hear the advice to postpone claiming until age 70. But if you are in your 60s, then it might not be the best option for you and more so if you have minor children at home, which is very common in blended families.
In such a situation, you might receive higher benefits by claiming at a younger age as you will receive dependent benefits as well. The dependent child benefit is equivalent to half of the claiming parent's full retirement benefit, even if the parent claims early. As per the situation, the younger spouse may also be eligible for a spousal benefit. Additional benefits like these may balance the lower benefit you receive by filing early.
Factors that affect this decision include:
- Total children who are in the household
- When will they turn 18 (or 19, if they are full-time students)
- The amount of your spouse's benefit
- The age gap between the spouses
Final Words
Social security planning is essential. It is best to hire a trained attorney specializing in social security planning to help you through the whole process.
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