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Social Security Maximization

Understanding Social Security Benefits

Social Security benefits are calculated based on your highest 35 years of earnings and the age at which you begin claiming benefits. The longer you wait to claim (up to age 70), the higher your monthly payout will be due to delayed retirement credits.

Investment Strategies for Social Security Maximization

Rather than claiming Social Security early, consider these investment-focused strategies to enhance your overall retirement income:

1. Delaying Benefits for Higher Returns

  • Every year you delay claiming past full retirement age (FRA), your benefits increase by approximately 8% per year up to age 70.
  • This guaranteed return often exceeds what many conservative investments can offer.

2. Utilizing Other Assets First

  • If you have investment accounts such as IRAs, 401(k)s, or taxable savings, consider drawing from these before claiming Social Security.
  • This strategy allows your Social Security benefits to grow while leveraging lower-taxed withdrawals from investment accounts.

3. Coordinating with Your Spouse

  • Married couples can use strategies such as the “restricted application” (if eligible) or delaying the higher-earning spouse’s benefits to maximize lifetime payouts.
  • Survivor benefits are also enhanced when the higher-earning spouse delays Social Security, ensuring a larger payout for the surviving spouse.

4. Considering Market Conditions

  • If the market is down, delaying Social Security allows you to avoid withdrawing from depreciated investments, giving your portfolio time to recover.
  • A well-diversified investment strategy that includes Social Security can provide stability and minimize sequence-of-returns risk.

5. Tax-Efficient Withdrawals

  • Up to 85% of Social Security benefits may be taxable, depending on total income.
  • Managing withdrawals from tax-advantaged and taxable accounts can help minimize taxes and extend the longevity of your retirement funds.

Making an Informed Decision

Maximizing Social Security isn’t just about delaying benefits—it’s about integrating it into a broader financial plan. Consulting with a financial advisor can help you develop a strategy that considers your risk tolerance, investment portfolio, and long-term income needs.

Are you ready to create a Social Security and investment plan tailored to your retirement goals? Contact us today to schedule a consultation.