For many Americans, Social Security forms a cornerstone of their retirement income. According to the Social Security Administration (SSA), about a third of an average retiree’s income stems from Social Security benefits. Despite the common urge to start receiving Social Security benefits as early as possible, a well-considered strategy can significantly enhance the amount you receive over time.

As a financial advisor with Global Advisers, I often guide clients through the complexities of incorporating Social Security into their overall retirement strategy. Below are key questions and insights related to Social Security:

Eligibility for Social Security Benefits

To be eligible, you must be at least 62 years old and have paid into the Social Security system for a minimum of 10 years. Although you can start receiving benefits as soon as you’re eligible, waiting can substantially increase your payments.

Determining Your Benefit Amount

The amount you receive from Social Security depends on the income you’ve earned over your career and the age at which you start claiming benefits. The maximum benefit for individuals reaching full retirement age in 2022 is approximately $3,345 per month. Understanding your estimated benefit amount is crucial for planning.

Factors Influencing Your Social Security Strategy

Several factors should influence when and how you claim Social Security benefits:

• Your health and life expectancy
• Your savings and their ability to cover expenses while you delay Social Security
• Your marital status, which can affect the strategy for claiming benefits
• Other retirement income sources
• Your planned retirement age and expected earnings if you continue to work

Increasing Your Social Security Benefits

Delaying your Social Security claim can increase your monthly benefit amount. Full retirement age varies by birth year, with an 8% increase in benefits for each year you delay, up to age 70. Coordination between spouses, considering benefits based on an ex-spouse’s income, and survivor benefits are strategies that can further enhance your Social Security income.

Reconsidering Your Claim

If you’ve already started receiving Social Security but wish to adjust your strategy, options include withdrawing your claim within a year of starting benefits or suspending your benefits at full retirement age to allow for increased future payments.

Factors That Could Reduce Your Benefits

Be mindful of potential reductions to your Social Security benefits due to taxes, Medicare Part B premiums, pensions from non-Social Security-contributing employment, and income if you’re working while receiving benefits.

Earning Limits While Receiving Social Security

Before reaching full retirement age, your benefits may be reduced if your income exceeds certain limits. However, after reaching full retirement age, there’s no penalty for earning additional income.

Understanding the nuances of Social Security can significantly impact your retirement planning. At Global Advisers, we’re here to help you navigate these decisions and ensure that Social Security works in harmony with your overall retirement strategy. For more insights on maximizing your Social Security benefits, consider speaking with one of our advisors.