Social Security Changes: 3 Ways to Maximize Your Benefits
With the recently signed federal budget, certain changes were made to social security. According to NBCNews.com, the biggest change made was the “file-and-suspend” social security strategy. Under the current law, the main beneficiary should claim his or her benefits first. Otherwise, claiming the spousal benefit will not be permissible.
Experts in investment management in Washington, DC recommend studying social security changes to maximize your benefits this year.
What You Need to Know about Social Security
File-and-suspend strategy has changed and will no longer be available starting in the second quarter of 2016. Nevertheless, it will still be possible to suspend your benefits starting at full retirement age and restarting it at a higher level at 70. Despite the changes, you do not have to give up on optimizing your benefits, as there are other policies to look forward to. The new rule on mortgages provides a big incentive for couples who will be 62 before the year ends. Ask your local advisor to learn more about social security changes.
How You Can Maximize Your Benefits
It is true that the policies for collecting social security can be complicated and unpredictable. Nonetheless, there are available strategies to maximize your benefits under the current conditions. Here are three of them:
- Plan your retirement carefully. To improve your benefits, make it your goal to work for a long time. Stay healthy, live well, and achieve work-life balance, to avoid feeling the need to retire early. Remember, social security calculates your “average indexed monthly earnings during the 35 years in which you earn the most”. Make your benefits count through putting in a full career while you are young.
- Choose your career wisely. Social security sets a maximum amount of salary of $118,500 yearly, which is subject to the payroll tax. The same amount of earnings will be credited toward your benefit. So if your earnings continue to increase year by year, chances are you will be eligible for the maximum possible benefit by the time you retire. Find a job that you love doing even if it pays poorly at first. Invest in experiences and look forward to great promotions.
- Learn everything you need to know about retirement. Experts say that it is best to not earn too much in retirement. If you file for a joint tax return, your social security benefit is nontaxable given that your income is below $32,000. If your income falls between $32,000 and $44,000, half will be taxable. Moreover, if your income exceeds $44,000, then 85% of your total benefits will be taxed.
For more information on investment and asset management in Washington, DC and Northern Virginia, we are here to help. AOG Wealth Management is a registered investment advisor that provides wealth and asset management services to individuals who want to make their financial goals happen. We can talk about your social security benefits, retirement plans, investment goals, and more.
Just give us a call at (866) 993-0203 and one of our financial advisors will be ready to assist you.