Most financial planners recommend late claiming. Instead of claiming the social security at 65, you had better claim it at the age of 70, since you can get higher monthly benefits. However, the recent tips on how to claim social security note that such recommendation may not be safe, since the Social Security System is regarded insolvent. Some analysts predict that late claimed will be disadvantaged due to the recent system.
How to Claim Social Security: Reasons to Claim Early
Question about the insolvency begins to appear. How insolvent is the Social Security System? First, imagine that the amount of tax money from workers has been smaller than the amount of money going out to pay retirees. What does it mean? Perhaps, the social security will not be able to pay the monthly retirement at one point in the future.
Secondly, the US Treasury recently signed imaginary IOUs as the source of cash. Again, many analysts predict it will evaporate soon. As a result, Congress will have to ask for tax increase or changes in the benefit formula. That is why some people decide to claim social security as early as possible. It is not because they could not afford to wait. Instead, they anticipate the future cutbacks.
William Baldwin, in a post on Forbes, suggests several ways on how to claims social security for high-income people. Focus of the recommendation is comfortable retirees. He defines comfortable retirees as owners of social security that have enough money to save for their children or charity in the future. In fact, many retirees actually do not have incomes besides the social security checks. Focus of this post is not that group of retirees.
How to Claim Social Security: Social Security Calculator
If you are a comfortable retiree, you can actually maximize the winnings by means of certain strategies on how to claim social security. Look at your Social Security asset. You may refer to a number of online calculators that estimate a value on the asset. The calculator works based on the information of ages and expected benefits you enter into the calculator. There are two important aspects of the software:
- The value of social security account should be large. The indication is seven figures for a couple that have been working for high-paying jobs for many years.
- Waiting to collect pays off. Actually, the system is designed with no differentiation between collecting small benefits by claiming earlier and collecting large one by claiming late.
However, healthy retirees would opt for waiting, as the bonus is too generous. Therefore, Baldwin suggests late claiming if you meet either of the two criteria. First, you are healthy. Second, your spouse is healthy and earning lower. In other words, claiming earlier can be a great choice for comfortable retirees, since you can maximize the benefits.
For course, early or late strategies have their own advantages and disadvantages. Again, discuss this with your financial planner. Ask him the true recommendation on how to claim social security and the benefits of claiming earlier or late.