Even if you are a six-figure wage earner with extras retirement savings in addition to social security, the federal benefit program can make up a significant portion of your retirement income. You have contributed money to the fund for most of your working life. And this year with maximum earnings subject to social security tax increase to $ 147,000 (up from $ 142,000 last year), you will pay more than ever to the fund.
If you try to maximize your social security payments when should you, as a high-paid employee, start receiving payments?
First, it is important to understand that continuing to work longer and later charging social security will not necessarily increase your benefit amount. Payments are based on the 35 years you have earned the most money. Therefore, if you have maximized your earnings and then decided to cut back to a position with fewer responsibilities and lower pay – or even took a part-time job when you were approaching full retirement – you are not increasing your social security payments by waiting to collect benefits.
The best way to maximize your social benefits is to live a long life and start collecting as early as your full benefits are available, or when you reach full retirement age. Full retirement age varies depending on when you were born. For anyone born after 1960, the full retirement age is 67 years. For most people, it is best to start collecting social benefits at age 67, or when they reach full retirement age. But there are a few other factors to consider.
Forbes writer Matt Dixon, CEO and financial planner at TruNorth Advisor, said: “If you live to a normal life expectancy, take payments ahead of time is the best way to get all you can out of social security. “Dixon recommended checking your expected social security payments on SSA.gov while planning to retire. Then calculate your total retirement income based on Social Security plus IRA and 401 (k) disbursements, plus pensions and investment income.
When social security expires: This is what the program will look like in 2035
See: 17 tips to live comfortably by Just a social security check
Unlike your other pension investments, if you do not use your social security benefits, you will lose them. That’s why Dixon said it might make sense to use your social security services first. Use your other pension income as needed so you can enjoy your pension. But remember, if you do not use your other investment money, you can still pass it on to your heirs to give them a head start in securing their financial future or even donate them to a favorite charity to help others and keep your legacy alive after. your death.
More from GOBankingRates
This article was originally published on GOBankingRates.com: Timeline for Social Security: When should high-ranking seniors claim benefits?