When it comes to preparing a financially comfortable pension, you need to plan ahead.
It is important to take advantage of your social security schemes, in particular. To increase your retirement income, you won't make up for early or make any important life decisions without considering the possible financial fee it may have on your savings.
"Social security is largely a profit -go program. This means that today's workers pay social security taxes into the program, and the money returns as monthly income to the recipients," says the National Social Insurance Center online and adds that around 1
In 2017, an average retired employee received nearly $ 1,400 per month in social security benefits. person's status (ie a disabled worker, widow or widow, etc.)
Social security is different from a traditional pension – an expensive company plan that guarantees guaranteed income for life.These types of packages are scarce today – only about 20 percent of the full-time private workforce still have traditional pensions, according to 2018 data gathered by Forbes.
"Git In today's lifetime, it is more important than ever to maximize your Social Security benefit. Think of this as an annuity for your life, "says Charlotte A. Dougherty, founder of Dougherty & Associates in Cincinnati, formerly Investopedia.
" Think of this as an annuity for your life. "
It is especially important to stay informed about social security, as programs have been increasingly exposed to the threat of long-term insolvency. An official forecast released at the end of the April projects will be. -year-old social security program could only pay about 80 percent of the benefits promised in 2035.
"By or around 2034, you should either cut social security benefits very sharply, or you should have raised taxes to basically retain benefits like those was, "MarketWatch columnist Brett Arends told FOX Business & # 39; Neil Cavuto at that time.
Social Security and Medicare currently accounted for 45 percent of federal spending in the United States Economists have also estimated that the cost of the rights programs is estimated to be nearly 8.7 percent of GDP in 2019.
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"The population gets older, the elderly vote me r … I don't think anyone is going to run for the office on a promise to cut people's social security when so many people rely on it, "Arends added.  For those who are planning to retire in the near future, here are five ways to take advantage of the social security benefits offered to you.
Work at least 35 years
The age you officially stop working affects the amount of money you receive. So many financial experts recommend working for 35 years – if not more.
Social Security "calculates average indexed monthly earnings over the 35 years you have earned the most," SSA (Social Security Administration) explains in a 2019 report. "We use a formula for these earnings and come to your basic benefit, or" primary insurance amount. ""
In this case, time is your friend. It allows you to increase your average income, which replaces periods of lower income in SSA's calculation.
"If you stop working before you have 35 years of income, we use zero for every year without income when we do our calculations to determine how many retirement benefits you will pay," SSA reported on its website.
Delay, Delay, Delay
If you choose to delay retirement over the age of 65, you can actually see a noticeable increase in benefits. The SSA says that it will increase the amount of benefit until you start accepting checks or until you are 70 years old.
According to Investopedia, the benefit amount increases by about 8 percent each year you postpone until the 70's.  Those who do not retire as soon as they meet 65 should still apply for Medicare benefits within three months of the 65th anniversary to avoid paying more over the long term, SSA recommends.
Don't Take Advantages Before 65
Technically, you can start receiving benefits within 62 years, but SSA advises this option.
"If you start earning money early, the benefits will be reduced a fraction of one percent every month before full retirement age," says SSA.
Think of your spouse
If you are married, you may be able to reap your spouse's benefits – even if you have never worked under social security.
According to NerdWallet, a spouse (born before 1954), can earn up to 50 percent wh at the highest household servant receiving at age 65.
"If You qualify and apply for your own pension benefits and benefits as a spouse, we always pay your own benefits first. If your spouse benefits are higher than your own retirement benefits, you get a combination of benefits that equals higher spouse benefits, SSA says.
Retirement age is a great time to consider a great move, especially if you live in a state that taxes your social security benefits.
So far, at least 13 states have levied taxes on social security schemes. They include Colorado, Connecticut, Kansas, Minnesota, Missouri, Montana, Nebraska, New Mexico, North Dakota, Rhode Island, Utah, Vermont, and West Virginia. In February, a 14th state – Illinois – said it was murdering a state income tax on social security schemes.
Although it may sound cliché, The Motley Fool says that Florida and Nevada are very tax options for retirees.
Fox Business & # 39; Elise Oggioni contributed to this report.