Social Security Explained | How to Maximize Your Social Security Benefit

How can you maximize your Social Security benefit? Social Security may be one of your primary sources of income in retirement, and you'll learn the tips on how you can be sure to get the most out of your Social Security benefit in today's video.

Timestamps:

00:00 - Introduction
1:15 - Full Retirement Age
3:00 - Cost of Living Adjustment
6:57 - Provisional Income
9:17 - State Income Tax
11:39 - Survivor/Spousal Benefits
13:11 - Example of Spousal Benefits
15:54 - TWO-Person Decision!
17:32 - Foundation of Planning

Learn the tips & strategies to get the most out of life with your money.

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[kellymcgrew]

You fail to mention how collecting social security at your full retirement age (FRA) AND continuing to work will increase one's benefit. My FRA was 66 (born in 1954) and I started collecting SS benefits at 68 (2022). As I'm still working and making the SS limit, my benefit increases each year as the 35 highest years are recalculated. My wife is five years younger than me, so her FRA is 66 and 10 months, at which time she will collect 50% of my benefits. I'm planning to work until at least 73 so my benefit should continue to increase each year as I replace lower income years with higher income years. Great videos!

[kayoticbushido]

I want to share a point of interest with you, specifically regarding the spousal benefit. What you mentioned is true, if the spouse is a home maker. However, if the spouse worked and the job does NOT pay into SS they will NOT be eligible for SS. Yes, if you work 50 years and your spouse worked 40 years and only 5 of those years paid into SS this spouse would NOT receive spousal benefit. This was recently told to me!

[cashflow]

Im waiting another 2 yrs to collect my maximum SS at 70. Since I was the higher earner, my wife started hers at 62. With her early SS, dividend paying stocks and 0 debt, it was an easy decision. Great explanation on SS benefit.

[holdentodd]

Great video! This is one of the best explanation of Social Security benefits and claiming guidelines that I have ever heard. As a 75 year retired CPA I went through the decision making process without good direction despite having a "so-called" financial planner.

[cindimeyers]

I'd love you to make a video when the older spouse is the low earner. When to collect for either person.

[BadPhD]

I appreciate your videos! Sure beats trying to read the SS website!

[huetang]

i believe you are over-simplifying the explanation of how much ss is taxed. the 3 buckets (0, 50, 85) are progressive. if the provisional amount is 33k, then only 50% of the amount over 32k is taxable, so .5*(33k - 32k)=$500 of ss is taxable. and if the provisional income is 45k, then .5*(44k-32k) + .85*(45k-44k) = $4k + $850 => $4850 is taxable. and these thresholds (0 to 32, 32 to 44, 44+) are for joint returns. single filers have lower thresholds, but the same progressive rules apply.

[FIRE_DrNinjaTurtle]

Thank you James. I just investigated whether I should wait to full retirement age or take it at 62. I would give up 180000.00 for five years to get 1000.00 per month more per month.

[cmbooks]

A very clear explanation of ss and the tax effect of retirement income. Thank you

[tammychick]

Great video! Your explanations are so easy to follow and understand. Thank you!!
What are your thoughts on the reductions in social security coming in 2034? Seems like that puts a whole new twist on planning and deciding when to start drawing.

[barbaramendoza]

It's really ridiculous to think someone should have to work past 62 life is really short to think all you are going to do is work. Wake up people in US. This is crazy and wait... insurance what a rip off. Nuts!!!

[vinnyg]

Great info James!

Although I believe most people know about some of this it's good to see information on SS benefits for planning on the whole financial picture. Helping a spouse after we're gone should be part of the equation assuming that our own health is good enough to work. I would hate to think that my wife was struggling after I'm gone or be a financial burden on our kids because she needs the money. Glad you did this!

[turnertruckandtractor]

Federal or state taxing SSI is just wrong.

[David-mvpw]

Taking mine at 70 plan on living to 105- 110 years of age.

[ericgold]

James says: for MFJ, if the provisional income (PI) is over $32k then 50% of your SS benefit is included in your taxable income. This is incorrect. 50% of the PI in the 32k - 44k bracket is included in taxable income. Similarly, 85% of the PI over 44k is included in taxable income. This calc is capped at 85% of the benefit being taxable

[Juarez]

Thank you James for all of this valuable information. I appreciate the way you explain things- at my level. I have a basic understanding of finances and retirement and I've learned so much from you! I've had an introductory meeting with Chris Riboli and I'm having another meeting with him tomorrow- my 62nd birthday! I'm looking forward to retiring in October!!!!

[craigfugit]

If a Spouse begins taking their Spousal Benefit prior to their Full Retirement Age (= a reduced benefit) does that benefit reduction carry-over to the Spouse’s Survivor Benefit when their spouse passes away?

[kenttappan]

I got ripped off badly when I became disabled many years ago. They said that because I waited too long to file that they didn't have to pay me maximum benefits like they would have if I had filed about 3 months earlier. So, I get about $3, 000 less a month than I should be. So stay on top of things or end up making not even enough to rent a decent home or even eat well.

[marcredgate]

James, why do we not include the published forecast reduction of Social Security benefits down to 78% in 2033?

[oanhNguyen-fgvc]

Hi James, thanks for the video, great content. Quick question, let say you work 25 years, and for the next 10 years just do Roth conversion at $100K/ year so does the taxes you pay on Roth conversion count/add to the calculation of years worked in the bene calculation? Thank you for your help