4 Simple Ways to Increase Your Social Security Benefit in 2024
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- čas přidán 9. 06. 2024
- Having a comfortable retirement is undoubtedly a shared goal, and understanding the intricacies of Social Security can significantly contribute to achieving that dream. In this video, I dive into four simple yet powerful strategies to help you maximize your Social Security benefits.
Know the Calculation Basics:
It's first essential to understand how Social Security benefits are calculated. Unlike regular taxes, Social Security is funded through payroll taxes. The first $168,600 of your earnings for 2024 is subject to a 12.4% tax, split equally between you and your employer. Your Social Security benefit is primarily based on this taxable income.
Understanding Bend Points:
Your Social Security benefit is means-tested using something called bend points. The first dollars you earn are weighted more heavily in the calculation. For instance, the initial $1,174 you earn contributes 90% to your benefit calculation, creating a unique system where lower-income individuals may receive a more substantial proportion of their earnings as benefits.
👉 Tip 1: Work a Full 35 Years:
Your Social Security benefits are determined by your highest 35 years of earnings. Every year you didn't earn income is counted as a zero. To get the most out of Social Security, be sure to work a full 35 years, even if some of those years are only part-time.
👉 Tip 2: Consider Delaying Your Benefits:
Waiting to collect your Social Security benefits can significantly increase your overall payout. Depending on your full retirement age, your benefits can grow by 5% to 8% per year if you delay collecting.
👉 Tip 3: Consider Spousal Benefits:
You could receive up to 50% of your spouse's benefit at their full retirement age. Even if you're divorced but were married for a minimum of 10 years, you still have the opportunity to claim a spousal benefit based on your ex-spouse's earnings.
👉 Tip 4: Consider Survivor Benefits:
In the unfortunate event of a spouse's passing, you become eligible for 100% of their benefit, provided they were already collecting it. Survivor benefits can be claimed as early as age 60.
Navigating the complexities of Social Security can be a critical factor in securing a comfortable retirement. By understanding the calculation methods and implementing strategic choices, you can maximize your benefits and enjoy a fulfilling retirement.
Retirement planning isn't just about Social Security. It's about crafting a comprehensive financial plan that aligns with your unique goals and circumstances.
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⏱Timestamps:⏱
0:00 - How benefits are calculated
3:02 - Bend points
6:42 - Work and wait to collect
9:20 - Spousal and survivor benefits
11:22 - Spousal benefits and SS strategy
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I started working in H.S. By the early 1980's I started working full-time right out of H.S. My wise organized older mother did all her children's income tax forms for us and mailed them into the IRS.
One of my first Full-time jobs I was wotking for an older jeweler. My mother told me he better be taking SS out of your paychecks...I got thr job through our neighbor. I was young and didn't understand but I remember him being all nervous one day and telling me he was going
to start taking SS out of my paychecks because he wasn't.
Thanks mom 🙏...
Because of you I have no zeros on mg SS statement from 1979 to present.
I'm planning to retire early.
Food for thought...my brother was waiting to the golden age of 70 to max out, but died of Lou Gehrig disease 6 months before turning 70.
Sorry to hear that. It is a gamble and sometimes it works out waiting till 70.
I’m sorry to hear that but keep in mind there are over 1 million Americans over age 90. If he was married, his widow is collecting her max survivor’s benefit.
Very unusual that some one would get that disease that late in life ! I know people that collected at full and lived 30+ years after that ! It’s one of the great mysteries of life is to guess when the best time to collect because that’s what it ultimately is!
Take "your money" as soon as you are eligible. No body knows what will happen tomorrow, let alone 8 years in the future.
Sorry for your loss. Depending on your career. If you love your job and able to work till 70, do it. If you can't, collect at age 62. Based on my calculations, you will have 14% more if you collect at age 67 vs. age 62 and if you live till age 88.
Nice presentation. Bend points (90% of first $1,174, 32% of next $5,904, and only 15% of anything above $7,078, per month goes into your base monthly benefit) - in other words, the Social Security benefit calculation is heavily progressive. Meaning the Social Security system is heavily subsidized by higher income earners to benefit low income earners.
Put another way, if you’re thinking working more years will have a big benefit on your SS benefit, once your 35 year average (even if you have a pile of zeros in there) hits $7,000/month, working longer has a minimal benefit to you, and primarily helps everyone else by funding the system, with your SS taxes.
Yep, I will get large benefit even with counting bagging groceries as a teen in my 35 years!
Did you mean $7k a year not month?
Do you mean an adjusted average of $7k a month over the 35 years or did you mean $7k per year?
Very well thought and stated, thank you!! I worked part time 6-7 years when we were young parents and-prior to James’ SS presentation here-I thought I needed to achieve 35 years of FT work earnings to offset those low income years. Wow. Not needed!!! I’ll be 61 this summer and will be retiring prior to or just after my 63 birthday in 2 years. We want to do Roth conversions a few years before starting our SS (my husband is 63, retiring the year after me) and I had been thinking I need to work ALL of 2026 to have another year of high earnings to offset for SS benefits . Thanks again for restating the affect of those bend points!
Very informative video, James, thank you. It would be great if you could add a bit more insight for the government workers who do not get to pay into Social Security for part of their careers.
Yes, please!. And if he could also help to people like me who will have their social security reduced because we are going to receive a government pension
Great Video... Me and the wife are drawing down from our 401ks and then taken S.S. at 65. we will have no more 401k left only Roths left. I am 59 and wife is 56 Both are now Retired.
Do you realize that you as a couple can receive $40,000 in SS and another $20,000 from your IRA and still pay no Federal tax.
If you don't need SS to live on, you may want to do the math to start SS at 62 and invest that money in the SP500 to see if you'll make more money long term. Don't forget to account for income and investment taxes.
Doesn’t the survivor benefit also apply to divorced spouses who were married 10+ years?
Yes
What if my husband dies before collecting social security. Would I still be able to get spousal or death benefits? Been married 15 years.
Is it 35 consecutive years they calculate? Does the income received on unemployment or short term disability count in the calculation?
No it’s the best 35 years. So if you took a few years off for family it’s okay. I believe only earnings count. If you log onto your social security account you can see how much your earnings were for every year you worked.
Great video! What about self-employed individuals? How are payments into SSI calculated? Also, when you refer to $168K, what line of your tax return is that from?
What if you are collecting 50% of spousal benefit ( divorced but married ore than 10 years) and your ex-spouse passed away. DO YOU NOW QUALIFY FOR 100%?
Is there a calculator where you can see how much social security benefits would increase if someone had non-working years, with zero income years, but went back to work so you can see how that would impact or increase their benefits?
There is a calculator on the SS security website and you can look at your specific lifetime earnings for correctness. You can also do “what if’s’ as to earnings and when you decide to begin drawing your SS.
I worked different jobs for at least 25 yrs.became disabled at an early age but was not approved for 5 yrs. After applying for disability I could not receive any money off my work history and all taxes that I paid in from the jobs I worked on nor the one I retired from, I feel really ripped off and cheated because I am not a as expert. How can I retrieve monies I am due from paying in all those taxes from jobs of my past history?
Great video on social security. I’m still not 100% sure on something. My salary is about twice as much as my husband. He is a little over two years older. We started working on a five year plan for early retirement, hoping sooner. We both have all the credits and 35 years of income for social security. If he was to start collecting at 65 will I be entitled to spousal benefits or do I need to wait until I’m of full retirement age?
Several years ago changes were made to SS. When you apply for a retirement benefit you are DEEMED to be applying for both your own and your spousal benefit. You get the higher of the two. The years of collecting a spousal benefit and letting your own benefit grow are over. This not the case with survivors benefits, where you can still pick and choose.
Could you please help the people like me who will have their social security reduced because we are going to receive a government pension??
If my full retirement age is 66 and 6 months, is the age to reach maximum SS benefit age 70 (or is it 69 and 6 months) ?
Maximum SS is 67 of age
Medicare tax is 1.45% as opposed to the 1.4% mentioned in the video. For both the worker and employer.
Right, and is only for Part A (hospitalization).
Hehe I can claim at 56 and 10 months. Thank you Quasi governmental agency employment!
Hi James, is the benefit 24% more at 70 vs 67, or 26% (8% compounded each year)?
Thanks!
I think it is 24%, but keep in mind that I think I read recently that you have to wait an additional year after 70 to actually get all of that 24%.
Are the bend % right?
More like a dollar amount Bend Points are used when you turn 62 They will not change regardless of when you start collecting
Of my best 35 years of work, 2 years weren’t that good (in 1980’s). How can I calculate how much I need to earn to replace those 2 years?
Those years like all the years are indexed for inflation until age 60 So if you made say $15,000 it could be indexed for $40,000
Payment is based on the Best Earnings or Avg. Period in 10 years. Ah
@@jameszoeller876110 years is not correct. It's the average of the highest 35 years of earnings after all earnings are adjusted for inflation. That average is then used to calculate your payment at full retirement age (aka your Primary Insurance Amount) by applying the bend points.
Can I collect spousal benefits if I started to collect at age 62 ? I am a widower!
Survivor benefits
If your spouse is a homemaker and you have under 18 kids do you still need to wait until 60 or 62? What about your kids?
Not sure of your question but you can't draw SS at age 60 and your kids don't get SS unless you or their mother die. Unless of course they are disabled themselves and then it's called disability or SSI.
Does the 8% increase for someone that hasn t started social security after full retirement age include the 3.2% increase for 2024
No the inflation adjustments are on top of the higher Social Security check
No
The 8% is on top of the COLA % increase for the previous year, I believe, so the 8% is a true 8% and still one gets the annual COLA % increases as well.
🤘
3:48. a) 90 percent of the first $1,174 of his/her average indexed MONTHLY earnings.
Probably obvious to most, but I wanted to be certain
Thanks
Correct. The Second bend point is 7078 for anyone turning 62 in 2024
Want a bigger check? Wait until you are 70 to collect
Good afternoon, I turn 62 in April 2023
My retirement is at age 67. When I turn 67 is my social security going to go? That's what I was.
Are you available to consult? What’s the best way to reach you?
Hi there,
My firm Root, works with clients on an ongoing basis for their financial planning needs. Check us out at rootfinancialpartners.com to see if it could be a fit for you.
Actually, if you continue working past 70, you can replace any $0 income years from your early years
Most of what you say is correct, HOWEVER, please use the correct tax rates. The Medicare portion of tax is NOT 1.4%, but 1.45%. As a retired CPA, it makes me wonder about the advice that you may be giving. When it comes to tax rates, you cannot be “nearly correct”.
It's easy to maximize your social security you work until you're 70 years old you want to know why because from the time you're 66 to 70 years old you will increase your social security payment by 32%
You don't need to work , you just need to not file for SS until 70
You can also have a heart attack and go out and collect disabilities Social security.
The person making $178,000 a year will have a bigger take home check then the person making under $50,000 a year. Therefore he will live a more comfortable life and be able to invest in other things instead of living paycheck to paycheck