Tips on how to maximize your Social Security benefits

The Retirement Planning Specialist

When should you claim Social Security looks simple for a single person who has never married, but if you analyze the best time to claim your benefits, there are ways even single people can maximize their benefits.
You should consider a couple of things:

• Which starting date for benefits will maximize the cumulative amount of benefits that you'll receive if you were to die exactly when the actuaries predict using standard life expectancy. What I would call a "good thing".
• Assuming a more optimistic scenario, which starting date will minimize your possibility of running out of money before you run out of life, or, not what I would call a "good thing". What happens if you outlive their predictions.

Generally speaking, if you live to age 80 and are single, your cumulative lifetime benefits will be approximately the same whether you claim your benefits at age 62 or any age through 70, however there are a few exceptions to consider or possibly avoid. 

"Social Security rat holes" as some advisors call them.

These exceptions occur due to built-in bonuses for delayed filing.   Bonuses which are calculated based on percentage increases of the "Primary Insurance Amount" or PIA.                                        Benefit amounts increase at three different ages:

• From ages 62 to 63, monthly benefits increase by 5/12 (0.42 percent) of PIA per month.
• From ages 63 to 66, monthly benefits increase by 5/9 (0.56 percent) of PIA per month.
• From ages 66 to 70, monthly benefits increase 2/3 (0.67 percent) of PIA per month.

Since the increases flatten out at two different levels, by taking benefits during these flat periods you won't increase your monthly benefit as you will if you claimed your benefits at the start of these periods of increasing benefits. As a single, and in some cases others who are not single, if you want to maximize the present value of benefits, it may be in your best interest not claim benefits between:

• Ages 62 and 1 month through 63 and 11 months.
• Ages 65 and 5 months through 66 and 7 months.

In order to understand why this is true you need to see your own personal monthly benefit totals calculation table.               Otherwise, you'll need to accept it on faith.
We can help you analyze your personal situation.                 Additionally, AARP web site has a free calculator that answers some questions, but it doesn't offer any sophisticated analysis.
Whatever informational route you take, understanding what Social Security offers and claiming benefits based on that knowledge can make thousands of dollars difference in your lifetime retirement income. I recommend for everyone to always do their homework and get professional advise from an expert in the field.                     I give the same advise to folks who need a surgery.                  Study your options than trust a specialist you feel comfortable with. This getting older business is not for the faint of heart.

Read more: http://www.bankrate.com/financing/retirement/duck-social-security-rat-holes/#ixzz2KzZkjcNE

 For educational purposes only. Not intended to promote the sale or purchase of any product.