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Nest Egg: How You Can Save on Your Social Security Insurance

Date : Oct 21,2015
By : Brooke Chaplan

Social Security is the government retirement program for people in the U.S. You pay taxes to help fund Social Security, and get a benefit in retirement that’s based in part on how long you worked and how much you made. Getting closer to retirement can be fraught with anxiety and nervousness as you try to plan for the future. If you feel like you’ll barely be scraping by, there are some things you can do to save on your Social Security and maximize your benefits.

Delay Claiming
One of the easiest ways to maximize your Social Security benefits is to wait as long as possible before claiming them. Though you can start getting them at age 62, if you do so, you will get thousands of dollars per year less than if you wait until your reach full retirement age, which is either 66 or 67 depending on when you were born. You can increase your benefits further by waiting beyond full retirement. You can delay claiming up to age 70, which can increase your benefit by several thousand dollars a year. Some strategies you might use to avoid taking Social Security early are spending down your other retirement assets, or tapping equity in your home through a second mortgage or a reverse mortgage. Talk to a mortgage lender in Houston to see about getting a home mortgage loan and how long it will take to pay back if you go this route.

Nest Egg How You can Save on Your Social Security Insurance

Coordinate Spousal Benefits
If you are married, you should coordinate your and your spouse’s benefits. For example, if a lower-earning spouse retires first, that person can claim the higher-earning spouse’s benefit until the other retires. This can result in more benefits, because both of you will still be eligible for full benefits at retirement.

Don’t Lose Benefits by Working
You can work and receive Social Security benefits, but if you do so before reaching full retirement age, you could lose some of your Social Security if you earn too much money. There is a limit that is adjusted annually. If you exceed that limit, you lose $1 in Social Security benefits for every $2 you earn over the limit. Once you reach full retirement age, you can work and earn as much as you want without losing any benefits. If you feel the need to take Social Security benefits early while still working, keep this factor in mind.

When deciding when to take Social Security benefits, you have to take into account how badly you need the money and what other retirement income sources you have. If a health condition forces you to retire early, you may have to tap Social Security early. But if you can delay, you should so you can maximize the benefits.