Get the Most From Social Security When You Retire

In the past couple posts, we’ve touched on six things you should know about Social Security — before you retire. There are three more you should understand to guarantee you get the most from Social Security when you retire.

Get the most from Social Security when you retire

Maximize your spouse’s benefits – legally

Here’s a Social Security claiming strategy that’s perfectly legal and potentially lucrative. Let’s say a husband decides he wants to delay taking his benefit until age 70 to maximize the amount of his monthly check. But he wants his wife to be able to take a spousal benefit, because it would be higher than her own benefit.

To make that happen, the husband, who must be at full retirement age, can file for his benefits and then immediately suspend them. Because he has applied for benefits, his wife can now take a spousal benefit based on his record. And because he suspended his own benefit, his benefit will earn delayed retirement credits.

You may have to pay taxes on your benefits

Benefits lost their tax-free status in 1984, and the income thresholds for triggering tax on benefits haven’t been increased since then. As a result, it doesn’t take a lot of income for your benefits to be pinched by Uncle Sam. For example, a married couple with a combined income of more than $32,000 may have to pay income tax on up to 50% of their benefits. Higher earners may have to pay income tax on up to 85% of their benefits.

You may have to take the “earnings test”

Bringing in too much money can cost you if you take Social Security benefits early while you are still working. With what is commonly known as the earnings test, you will forfeit $1 in benefits for every $2 you make over the earnings limit, which in 2012 is $14,640. Once you are past full retirement age, the earnings test disappears and you can make as much money as you want with no impact on benefits.

Social Security has a lot to offer retirees and it’s easy to maximize Social Security retirement benefits. Take the time to learn about the program and you’ll get the most from Social Security when you retire.

Click here to read more about how to maximize social security benefits

Click here to read: What You Should Know About Social Security – Before You Retire

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