Millions of retirees depend on Social Security, so it pays to make the most of your benefits. As we head into the new year, now is the perfect time to review your information and take a few simple steps to maximize your payments.
It doesn't have to be difficult to start preparing, either. Whether you're planning to retire in 2024 or still have a few years left in your career, these nearly effortless moves can set you up for success.
1. Check your estimated benefit amount online
You don't need to wait until you begin claiming Social Security to see how much you'll receive in benefits. Checking your benefit amount only takes a few minutes and can make retirement planning much easier.
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To see how much you can expect, you'll need to check your Social Security statements. Some people may receive them by mail, but you can also check them online through your mySocialSecurity account.
If you've worked and paid Social Security taxes for at least 10 years, you should see an estimate of your benefit amount, based on your real earnings. This figure is what you'll receive if you file at your full retirement age (FRA). If you file before or after that age, it will affect your payments.
When you know roughly how much to expect in benefits, it will be easier to determine whether your savings are on track. If you find that you'll be receiving less than you planned from Social Security, now is the time to start beefing up your nest egg.
2. Determine your full retirement age
Your FRA is the age at which you'll receive the full benefit you're entitled to, based on your work history. It depends on your birth year, but everyone's FRA will fall between ages 66 and 67.
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Filing early will reduce your payments, while delaying past your FRA will result in larger checks. The exact adjustments will depend on your FRA. If you have an FRA of 67 years old, for example, filing as early as possible at 62 will reduce your benefits by 30%, and waiting until age 70 will give you a boost of 24% on top of your full benefit amount.
Knowing your FRA is the first step to deciding the age at which you want to file. There's not necessarily a right or wrong time to take Social Security, but it's important to know how your age will affect your monthly benefit amount.
3. See whether you're eligible for spousal or divorce benefits
Retirement benefits are available to most workers, but if you're married or divorced, you could also qualify for spousal or divorce benefits.
Spousal benefits are generally available to those who are married to someone entitled to either retirement or disability benefits. With divorce benefits, you and your ex-spouse must have been married for at least 10 years, and you can't currently be married.
In both cases, the maximum you can receive is 50% of the amount your spouse (or ex-spouse) is entitled to at their FRA. Spousal and divorce benefits also will not affect the amount your partner (or ex-partner) will receive from Social Security. And if your ex-spouse has remarried, claiming divorce benefits also won't impact their current partner's ability to claim spousal benefits.
The average spousal or divorce benefit is around $886 per month, as of November 2023. If you're eligible for this type of benefit, then, it pays to take full advantage of it.
The more planning you can put into retirement, the better your chances of retiring comfortably. As we head into 2024, taking these three simple steps can help ensure you're as prepared as possible.
