Maximizing Your Social Security

You can start collecting Social Security
as early as 62 or as late as 70. The earlier you begin, the smaller the annual amount you get. And the later you start, the larger your payments. The underlying principle the SSA has adopted in providing these options is trying to equalize the lifetime value of the benefits.

If you’re not working when you turn 62, and Social Security income would help cover your living expenses, you can apply for your benefit. If you were born between 1943 and 1954, you’ll be eligible for 75% of the amount you would have received if you were 66. That reduction is permanent. If you were born between 1955 and 1960, that percentage drops gradually to 70% as full retirement age increases to 67.

If you’re working when you start taking benefits and your earnings for the year are more than the limit Congress sets, some of your benefits will be deferred until after you reach full retirement age. Specifically, SSA withholds $1 for every $2 you earn over the limit if you’re 62 through 65, and $1 for every $3 over the limit the year you reach full retirement age. The SSA can help you decide on the timing of your first payment to maximize your benefit, so it’s smart to ask for advice.

When you’re ready to begin receiving your benefit, you must choose from among three electronic payment alternatives. The money is transferred to your account automatically on a set monthly schedule. You can have the benefit deposited directly into an existing checking or savings account or new account you set up. pay bills, or withdraw cash. Most but not all transactions are free.

You can sign up for the DirectExpress debit card program. Deposits are made directly to the card, and you can use it to make purchases, pay bills, or withdraw cash. Most but not all transactions are free.

You might consider a low-cost Electronic Transfer Account (ETA) with a federally insured bank or credit union. Most ETA providers allow ATM withdrawals and point of sale purchases, but there may be fees for using ATMs the ETA provider doesn’t own or for more than a limited number of withdrawals.
For more information on these options,
visit www.ssa.gov/deposit/index.htm or call 800-772-1213.

Contributions from the book Planning Retirement Income in this press release are used with permission from Light Bulb Press.