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December 19, 2014
It’s worth thinking hard about when and how to take Social Security because it has some unique benefits that aren’t offered by any other retirement solution:
There are two primary strategies for getting the most out of Social Security:
The first strategy is to optimize when you claim the benefit.
I forecast my own Social Security numbers and this is what I came up with:
For almost everyone it pays to wait until your full retirement age – whether you wait until your maximum claim age depends on if you think you’ll live longer than 80 years old. Use this Social Security Calculator to figure out the best time for you to start your benefits.
If I file and suspend at my full retirement age so that my spouse can claim a spousal benefit starting at age 67, she gets a bonus of approximately $1,800 per month for thee years worth. This equals approximately $65,000. This allows both of our Social Security Benefits to continue growing as if we had not claimed anything until our Maximum Retirement Age of 70. If we then both claim our maximum Social Security Benefit at 70 and then live until our mid to late 80s we pretty quickly get to over $100,000 in total additional Social Security benefit.
You get a pretty big lift if you can maximize your benefit and you are lucky enough to live a long time.
The second big strategy that homeowners have to insure their retirement is to explore leveraging their home equity as part of their overall retirement plan. This is not a common strategy: actively including your home equity as part of your retirement plan. This despite the fact that, for most homeowners, their home equity is their biggest asset.
By planning ahead consumers can set up a line of credit that grows over time. They can tap into it if necessary, but they won’t pay interest on if they don’t use it. Here are some of the key benefits to this strategy:
Learn more about this strategy in this detailed article: How to Use Home Equity to Insure Your Retirement.
By thinking through these strategies and taking action now to implement a plan – consumers can materially improve their chances of maintaining their quality of life in retirement.
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