How to Collect More From Your Social Security Benefits

By Nathan Garcia | Social Security

Feb 02

Would you like to collect more money from your social security benefits? If so, keep watching this video because in this video will cover three things that you can do in order to increase your social security benefits.

In this video, I will help you understand how to maximize your social security benefits, so that you are making a smart filling decision for the future and also for your family.

How do you get more from your social security benefits?

The first thing that you can do is to wait until your ForeRetirement age to file for benefits. If you have questions about what your ForeRetirement age is check out the link below where I have completed another video that will actually walk you through that. But if you file for your social security benefits before your ForeRetirement age then your only received a fraction of the amount that is actually available to you. So if you file at age 62, you may only receive 75% of the amount that you paid for whereas if you wait for your ForeRetirement age you’ll collect a 100% of the benefit that you paid for and if you wait beyond your ForeRetirement age, you could collect at up to 132% of your benefit if you wait until age 70. So that can be powerful for you depending on your personal situation. So the first thing that you want to do if you are looking for an increase in social security benefit is to wait until your ForeRetirement age to file.

Second, now filling at your ForeRetirement age has multiple benefits, not only when you collect 100% of the benefit that you paid for but also you no longer worry about the earnings tax. The earnings tax applies if you file for your social security benefits before your ForeRetirement age. Basically what the social security administration will do is look at how much money you are earning and put that through a equation in order to potentially offset some of your social security benefits.

So if you are making too much money that can actually withhold some of your benefits and the reason being is that the looking at your social security benefit as retirement benefit and if you are still working you’re really double dipping and so for that reason, the system will penalize you for that. So they really wanted to incentivize you to only collect your benefit when you reach your ForeRetirement age and so if you wait until your ForeRetirement age to file, you don’t have to worry about your earnings tax. So the second thing that you can do to increase your benefits is to again wait until your ForeRetirement age to file, so you don’t have to worry about your earning tax.

The third thing that you can do to increase your social security benefits is to reduce your taxable income. Your ordinary income is going to determine how much of your benefit is taxed. Now I know that might sounds crazy that your social security benefit that you paid for your own tax dollars is subject to taxes but that’s system that we have and so with that in mind, we want to reduce how much of our benefit could be taxed right?

In order to do that, you have to look at your filling status. If you’re married filing jointly then if you earn over 32 thousand dollars a year, your benefit up to 50% could be subject to ordinary income. Basically that means that 50% of your benefit that could be added as ordinary income and subject to tax. If you make over 44 thousand dollars a year as a couple then up to 85% of your benefit could be subject to tax.

So whatever amount you earn could up to 85% of that could be added on and taxable as ordinary income, so you really want to be cognizant of this because it can have a lot of implications on what your marginal tax is or how much you are paying as taxes and if you are smart about it and if you are using a financial plan then looking at some different filling options before making a final decision then you’ll be able to determine how you can reduce your marginal tax rate and potentially increase your social security benefits.

The big reason this is so important is that at age 70, you are required minimum distribution can get and so if you are already in a higher tax bracket then you could have 85% in those social security benefits taxed as ordinary income and that can really limit how much of that money you are bringing home obviously but it could cost you take more money out of your portfolio to make up for the money you are losing in taxes.

And so for that reason, you really want to look at your social security filling decision in conjunction on what your overall financial plan, your looking at your income investment and your tax situation as a whole before you make a filling decision.

So how can you increase your social security benefits there’s really three ways, first off, don’t plunges off your retirement age, so that you are eligible to collect a 100% of your benefit. Second, you really want to wait fore Retirement age to file, so that you won’t be subject to earnings tax. Finally, you want to make a final decision once you understand the tax impact of that filling decision, how much of your social security benefits will be subject to tax if you can reduce that amount and increase your social security benefit.

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About the Author

As a retirement planning specialist my goal is to help people overcome the anxiety involved with giving up their job and transitioning to retirement. I do this using a comprehensive financial plan to model your financial world and the "what ifs" that retirement holds.