Understanding How to Get the Most Out of Your Social Security Benefits

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If there is one universal truth about finances, it is that no two retirement plans look the same. Your specific financial situation will dictate how you approach your savings and your social security benefits. There are many good reasons to delay your Social Security payments, but you can also make a good case for receiving them early. Let’s explore what you need to know about Social Security and how to maximize your benefits to enhance your retirement planning in West Palm Beach. 

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What You Need to Know About Social Security  

Why Was Social Security Created?   

Following the stock market crash of 1929, the United States experienced a massive surge in unemployment that heralded the beginning of the Great Depression. The older population was disproportionally affected because many could not work, and with unemployment rates rising above 25%, the elderly could not find the support they would need to live comfortably.   

The Social Security Act was signed into law by President Franklin D. Roosevelt in 1935 as a response to the effects of the Great Depression. The Act was intended to provide a social safety net and financial assistance to people who worked their entire lives and can no longer continue to do so. In the words of FDR himself upon signing the Act: 

“We can never insure one hundred percent of the population against one hundred percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and to his family against the loss of a job and against poverty-ridden old age.” 

What is Social Security? 

Social Security was intended as a pay-as-you-go system in which workers contribute to a nation-wide pool through taxes. That money is then distributed back to beneficiaries like retired, disabled, or deceased workers in the form of a monthly income.  

A Few Things to Keep in Mind About the Modern State of Social Security 

  • In 2021, the average Social Security beneficiary will collect $1,543, according to the Social Security Administration.[5]
  • In 2021, the maximum benefit anyone can receive is $3,895, which includes delayed retirement credits up to age 70.
  • For self-employed people who must pay both the individual and employer Social Security (FICA) tax, the maximum tax in 2021 is $17,707.20.

Can You Retire on Your Social Security Payments?   

Ideally, Social Security should be seen as supplementary income rather than relying on the payments to retire comfortably. In many cases, lifestyles demand more expenses than Social Security can cover. This means that the best way to secure your financial future is by having several revenue options as part of your retirement planning in West Palm Beach. 

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Getting the Most Out of Your Social Security Benefits  

Should You Claim Your Social Security Benefits Early?   

If you are considering an early claim before your full retirement age (FRA), you should keep in mind that your benefits will be reducedThe qualifying age for receiving full benefits varies depending on your birthdate. However, this also applies to surviving spouses of beneficiaries[1]. Here are the current guidelines for FRAs: 

  • For people born between 1943 and 1954, FRA is age 66. 
  • For people born between 1955 and 1959, FRA ranges from 66 and 2 months to 66 and 10 months. 
  • For people born in 1960 and later, FRA starts at 67. 
  • For surviving spouses born between 1945 and 1956, FRA is age 66. 
  • For surviving spouses born from 1957 to 1961, FRA ranges from 66 and 2 months to 66 and 10 months.  
  • For surviving spouses born in 1962 and later, FRA is 67. 

Why Would You Claim Earlier Than FRA?   

Despite the reduced benefits, there are a few reasons to claim your benefits before FRA. One reason to start them early is if you met your retirement goal and want to enjoy an early retirement with Social Security as a supplementary income 

Another reason to claim early benefits is if you want to give your investments more time to grow, so you don’t have to draw from your retirement accounts — at least not until you have to take required minimum distributions (RMDs) at age 72.[2] Taxable brokerage accounts have the potential of continued growth without any additional contributions. 

Why Should I Delay My Social Security Benefits?  

Delaying social security benefits carries several advantagesPerhaps, the biggest reason to wait for your FRA is that you’ll receive a higher monthly payout by avoiding the permanent reduction in benefits you would receive if you don’t choose to wait 

If you delay beyond FRA, your permanent benefit will begin to collect credits ranging from 5.5% to 8% (depending on your birth year) up to age 70.[3] This is an excellent option if you continue to work through your 60s and/or have plenty of retirement assets you can rely on for income without needing additional revenue streams  

As a general rule, the longer you wait, the higher your benefit payments, not just for you but your surviving spouse as well. These benefits would also carry over to children who are eligible to receive payments. 

How to Decide When to Draw Social Security Benefits 

You should take several factors into account before you decide to claim your benefits, including: 

  • Age 
  • Income 
  • Ability/desire to work 
  • Spouse’s income
  • Health 
  • Current assets  
  • Whether or not your mortgage is paid  
  • The lifestyle you want to enjoy during retirement 

We can help you evaluate your entire financial picture and guide you through your retirement planning in West Palm BeachOur goal is to secure your financial future.  

What Should I Know About Spousal Social Security Benefits?  

There are a few variables to keep in mind for claiming spousal benefits. For example, a spouse can receive 50% of the higher-earning spouse’s Social Security benefit or the benefit based on their personal work history — this will default to whichever is highestYour spouse may apply for benefits based on the primary earner’s work history, but only after the primary earner has already claimed benefits.  

You should keep in mind that spousal benefits are only available after the couple has been married for at least a year. When a couple has divorced, the ex-spouse can apply for benefits if the marriage lasted ten or more years but only if they have been divorced for over two years.[4] 

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Want to Learn More About Retirement Planning in West Palm Beach?  

Legacy Financial Partners is here to help you navigate retirement and give you the tools you need to ensure comfort beyond your career. Get in touch with us today to learn more!   

Content prepared by Kara Stefan Communications. Edited and Optimized by Digital Resource.  


1 Liz Weston. The Los Angeles Times. Jan. 6, 2021. “For Social Security benefits, playing a waiting game really pays off.” https://www.latimes.com/business/story/2021-01-06/social-security-benefits-waiting-pays-off. Accessed Jan 6, 2021. 

2 Christy Bieber. Daily Journal. Jan. 6, 2021. “3 Great Reasons to Take Social Security Benefits at 62.” https://dailyjournalonline.com/business/investment/personal-finance/3-great-reasons-to-take-social-security-benefits-at-62/article_2a84328d-4d06-5f4e-9a4d-37b3b7fd8c3c.html. Accessed Jan 6, 2021. 

3 Justin Kuepper. Dividend.com. Dec. 11, 2020. “How to Make the Most of Your Social Security Benefits.” https://www.dividend.com/retirement-channel/making-the-most-of-your-social-security-benefits/. Accessed Jan 6, 2021. 

4 Rachel Hartman. US News & World Report. March 11, 2020. “How to Maximize Social Security With Spousal Benefits.” https://money.usnews.com/money/retirement/social-security/articles/how-to-maximize-social-security-with-spousal-benefits. Accessed Jan 6, 2021. 

5 Maurie Backman. Mooresville Tribune. Jan. 6, 2021. “5 Essential Social Security Numbers You Need to Know in 2021.” https://mooresvilletribune.com/business/investment/personal-finance/5-essential-social-security-numbers-you-need-to-know-in-2021/article_3d757b8d-d266-537d-89d8-dbeaf3607108.html. Accessed Jan 6, 2021. 

We are an independent firm helping individuals create retirement strategies using a variety of insurance and investment products to custom suit their needs and objectives. This material is intended to provide general information to help you understand basic financial planning strategies and should not be construed as financial or investment advice. All investments are subject to risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values.  

The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions. If you are unable to access any of the news articles and sources through the links provided in this text, please contact us to request a copy of the desired reference. 


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