Preparing to retire and begin claiming Social Security can be an exciting chapter in life, but it's important to make sure you're as prepared as possible. Social Security benefits can make up a substantial portion of your retirement income, so it's wise to make the most of them.
By taking advantage of the following three moves before you file, it will be easier to maximize your income in retirement.
1. Double-check your benefit amount
Even if you haven't retired yet, you can check your estimated benefit amount to see how much you're expected to receive. To do this, start by creating a mySocialSecurity account online. Within your account, you'll see your Social Security statements, which will include your estimated benefit amount based on your real earnings throughout your career.
If you plan to retire soon, knowing how much of your income will come from Social Security is critical. When you know roughly how much you'll receive from Social Security, it will be easier to tell whether your savings are on track.
2. Make sure you know how your age will affect your benefits
You can file for Social Security at age 62 or any age thereafter, but the longer you wait (up to age 70), the more you'll receive each month. There's not necessarily a right or wrong answer as to when you should claim, as each age will have its advantages and disadvantages. But it's important to know how your age will affect your benefit amount.
When you check your estimated benefit amount online, that amount assumes you'll be claiming at your full retirement age (FRA) -- which is either age 66, 67, or somewhere in between, depending on the year in which you were born. If you file before that age, your benefit amount will be permanently reduced by up to 30%. By waiting until after your FRA, you'll receive your full benefit amount plus a bonus of up to 32% per month.
3. Consider how your spouse factors into your strategy
If you and your spouse are both entitled to Social Security, it pays to have a strategy in place for when each of you will claim. Again, there's not necessarily a right or wrong answer here, but considering how your spouse will affect your strategy can be a smart way to maximize your benefits.
For example, you could choose to have one spouse claim early while the other delays benefits. In that scenario, you'd both have some extra income earlier in retirement, while still taking advantage of the larger checks you'll earn by delaying.
Also, if one spouse passes away, the other may be entitled to the deceased partner's full benefit amount in survivors benefits. In some cases, then, it might make sense for one person to delay benefits so that if he or she passes away, the surviving spouse could collect a higher monthly payment.
Social Security benefits can play a major role in retirement, so it's a good idea to make sure you're taking steps to maximize them. When you have a solid strategy in place, you can file for Social Security with confidence that you're doing everything possible to prepare.