Intro
Social Security strategies have changed significantly in the past decade. Although Social Security does not make choices regarding age, income, or location when calculating an individual’s retirement needs, it does give people options in how and where they receive their benefits. Social Security provides many important services that help protect Americans from financial hardships in the years after retirement. In addition, Social Security provides disability insurance benefits and medical assistance for those needing it most.
Client-by-Client Basis
The best Social Security strategy depends on the specific needs of each person. Each year, the government analyzes the latest statistical data on American retirement patterns to make well-informed decisions about which beneficiaries to award retirement benefits. The optimal Social Security strategy is determined on a client-by-client basis, focusing on each individual’s probability of earning a higher Social Security benefit level after retirement. All future earnings and potential early death benefits are considered. All potential secondary benefits (age-related disabilities, survivor and dependents benefits, and disability income) are also analyzed. All benefits awarded must meet anticipated needs.
As people get older, they are more likely to leave their jobs and pursue other careers. This means that at any given social security age, there are a decreasing number of employees eligible for social security retirement benefits. Social Security has developed tools to adjust the social security retirement age to keep people working and qualified to collect their benefits every year. In fact, the majority of American workers will reach the required retirement age every year, but millions of others will not.
Retirement Age
Social Security’s optimum strategy is to ensure that every year’s baby boomers have the same full retirement age. For that purpose, social security age has been postponed to 66 years old beginning with the 2021 birth of the newest baby boomer. Baby boomers who reach the full retirement age will remain from that year forward. Boomers have a great deal to gain by delaying their retirement. They are likely to receive Social Security benefits at much lower pay rates and will also increase their lifetime incomes by several percentage points as well.
Two other popular strategies include increasing the lifetime benefits and delaying the onset of death. Each one combines different aspects of social security’s optimal strategy to achieve the desired results. While claiming strategies can be implemented by the employee or the employer, these two strategies take the most time and provide the best returns.
Life Expectancy
It is important for a worker to understand how to adjust the social security rate, as well as the maximum benefits in order to keep receiving benefits at the lowest possible rate into the future. A worker must also understand his or her life expectancy and how that affects the retirement age. Adjusting these two variables is quite involved, but well worth the effort for a worker who wants to see a substantial amount of money to return to him or her over the course of their lifetime. In addition to all of the above, it can also benefit an employee to change the premium he or she currently has. Most policies’ premiums move with life expectancy, so it pays to shop around for the best deal.
