Understanding and Maximizing Your Social Security Benefits

Before you can retire, you should know what all of your sources of income are going to
be, and how much you can expect to receive from each. Social Security benefits will, obviously,
be one of those sources, but how much you can expect to receive depends on a variety of factors.
There are ways to maximize your benefits and get the very most to which you are entitled, and
there are strategies to minimize your tax burden from Social Security. The most important thing
you need to consider in working toward those goals, however, is whether your Social Security
benefits are coordinated properly with your other assets and sources of income.

Let’s start with some basic facts about social security:

  • Money you can’t outlive – Social Security is one of the few sources of income you can’t
    outlive. Once you start taking them, your benefits continue to your death, and the longer you live
    the more you will extract from the system. If your benefit starts at $2,000 per month, and you
    live 10 more years, you will receive over $300,000 in lifetime benefits. If you live 30 more
    years, you’ll receive over $1 million over your lifetime, assuming annual cost-of-living
    adjustments of 2.8%. That’s good news because retirees are living longer and longer. Today
    there is a 50% chance that the average 65 year old will live into his late 80s. For the average couple aged 65, there is a 50% chance that at least one spouse would live to age 92…

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