5 Things to Know Before Applying for Social Security
There are 5 things to know before applying for Social Security retirement benefits. The largest plan for retiring years in the United States is Social Security retirement benefits.
Almost all senior citizens will receive SS benefits at some point in their adult life. Although, much remains misunderstood about Social Security by many.
No two retirement plans can be identical, as no two people have identical lives.
Everyone is their own person, with the choice to walk their own path. However, everyone reaches the age of retirement and some information pertains to every situation, no matter how different.
5 Things to Know Before Applying for Social Security
Applying for Social Security is something we may all face in our later years. Before doing so, there are things future retirees should become familiar.
Most importantly is understanding your full retirement age, and when the right time to apply. Investment tools and knowing how to save during retirement years can be extremely beneficial.
Some individuals choose (or must) continue working after retiring. In these situations, weighing out the pros and cons can help determine suitability.
Retirement plans are custom to each person’s circumstance; what works for one person may not work for another.
Surprisingly, many future and current retirees don’t even know how to calculate benefits. Fortunately, online tools can help with calculating benefits.
Considering family members during this time in life is also crucial. Many times, retirement decisions impact the retirees’ close relatives and loved ones.
1. Know Your Full Retirement Age Before Applying for Social Security
The time to begin applying for Social Security retirement benefits may be different from one person to the next. For most it’s between the ages of 62 and 70; seniors may choose when to claim Social Security retirement benefits.
Although, your full retirement age is a bit different. Full retirement age is the age an individual may receive full benefits.
This age maybe 66 for some or 67 years old for others; it varies depending on the year of birth. Seniors born in 1954 reach full retirement age at 66.
However, those born in 1960 or after reaching full retirement age at 67. Online tools are available to help calculate this age.
2. Retire Wisely by Investing and Planning Properly
Americans have a longer life expectancy than in earlier years. Today, 25% of 65-year-olds live past the age of 90!
With such a long-time following retirement, it’s smart to invest savings where money can grow.
Before applying for Social Security consider investing in stocks and bonds; this is a great way to grow your savings during retirement. Although, retirees should be careful while doing so; don’t invest too much in stocks.
At times the market can temporarily plummet. If this happens during a time you need to make a major withdrawal, you may face severe losses.
Instead, try having a nice blend of stocks and bonds; especially for those who anticipate they’ll live a longer life.
Reaching retirement can become quite stressful. For starters, many financial adjustments must be made.
Creating a plan for spending may help in the years leading up to retirement. Once in retirement, paychecks are no longer supporting day-to-day expenses.
Try to use this spending plan to budget and balance finances.
3. The Benefits of Working After Retirement
Continuing to work after reaching the age of retirement is common. For some, this is voluntary and for others, it’s financially necessary.
Either way, working after retirement may have many benefits.
Many individuals receive more than just a paycheck from continuing to work after reaching retirement. Some find it gives them purpose and happiness.
It may also postpone the potential onset of diseases related to old age – such as dementia by keeping individuals active.
Continuing to work provides a social and active lifestyle; preventing isolation while creating a feeling of purpose. However, many find the additional money a nice bonus.
Retirement jobs may offer working individuals additional funds for gifts, social events, or traveling. Although ideal, not everyone has a savings fund.
These jobs can help cover financial gaps – allowing retirees to enjoy a better lifestyle.
Working until the age of 65 is the choice of many due to the employer health insurance or any other benefits. Sometimes, employers will also pay for Medicare supplement insurance.
4. Understanding Benefit Computation Before Applying for Social Security
Before applying for Social Security retirement benefits, it’s important to know the determining factors for calculating benefits.
Every person is different; therefore, retirement plans vary among individuals. Although with 3 steps, personal calculations can be made right from the computer.
Online tools can help you find your Average Indexed Monthly Earnings (AIME). You’ll need to know your AIME to estimate benefits.
Social Security retirement benefits are lower for retirees with less than 35 years of income earnings. Unfortunately, many people leave work to care for a relative or get laid off, leaving them without work for 3+ years.
The Social Security Administration suggests working until you reach a full 35 years of income earnings. This may help avoid lower retirement benefits.
5. Family Considerations Before Retirement
Going through life with relatives and family near-by means retirement impacts more than just you. Consider retirement a family event.
Relatives are more often depending on each other for financial support from time to time.
Over the last 5 years, 62% of individuals over the age of 50 – financially assisted their parents, siblings, grandchildren and/or adult children. A major problem is a lack of planning in this age group.
Even though the evidence shows they’re highly likely – most seniors don’t budget or prepare for helping their families.
The average support for family and relatives over the last 5 years (by those age 50 and over) is as high as $14,900. A number like that should be taken into consideration when budgeting.
Planning for the future and retirement may also include this financial support. While many retirees don’t plan to financially support their family members or adult children, unexpectedly they end up lending a helping hand.
Factoring potential situations make for efficient planning for retirement. You never know what the future has in store and life is full of events.
Retirees can properly plan by factoring family situations into their budget.
Applying for Social Security Benefits with Confidence
Although your path for retirement may be different from another person’s – everyone can feel confident when having the right tools and resources.
The combinations of life situations are vast. Like fingerprints, everyone will have their own retirement plan.
No two lives are the same; so, no two plans for retirement can be the same.
Retirement benefits are custom to each person’s life. Some retirees are older, some have worked for less than 35 years, and others may choose to keep working after retirement.
Whatever your retirement needs are, there’s a plan to help.
These years should be fun and used to enjoy life. Understanding these 5 things to think about when applying for Social Security retirement benefits will help retirees apply with confidence.