Six tricks how to increase the amount of social security

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According to the Social Security Administration, more than $ 955 billion in social security benefits will be paid in 2017. If you are approaching retirement age or are already getting help, there are tricks you need to know in order to maximize your share of social security.

Edition Go Banking Rates below are the 6 lifehacks.

1. Later retire to receive more social security

While it may be tempting to claim your Social Security benefits as soon as possible, consider your options carefully. The longer you wait to claim benefits—at least until age 70—the larger your monthly benefit will be.

Depending on when you were born, retirement at the age of 62 years leads to a reduction of 20-30% per cent monthly compared to the number of years 70.

You may not retire in 70 years to further increase the monthly benefits. Every year after 70 years, your allowance will increase from 5,5% to 8% per year.

2. Use the benefits of spouse benefits

If you are married, compare your benefits with those of your spouse’s social benefits.

For example, if you stayed home with your children, you may not have paid as much social security taxes as a spouse who has worked for over a year.

As a result, you may be eligible for a higher spouse recording allowance.

Even if you are divorced, you can still claim benefits in the labor book of your ex-spouse if you have been married for at least 10 years and have not been married to anyone else while you file application for benefits.

3. Do not receive social benefits if you are still working

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If you've reached early retirement age—but not full retirement age—you should avoid taking Social Security altogether if you're still working. Taking payments too early will not maximize your Social Security income. You may receive reduced Social Security benefits instead.

Full retirement age varies depending on when you were born. If you were born before 1938, your full retirement age is 65. But gradually increases every year thereafter, until you reach the full retirement age of 67, if you were born in 1960 a year or later.

If you apply for benefits up to your full retirement age, your income will reduce your social security benefit by $ 1 for every $ 2 you receive over the limit, which is $ 16 920 to 2017. For example, if you have $ 20 920 earned income, your benefit will be reduced by $ 2 000.

In the year when the minimum retirement age is reached, the penalty becomes less severe: your benefits are reduced by $ 1 for every $ 3 over the limit, which is $ 44 880 for 2017.

4. The higher your gross income, the greater the portion of your social security benefits that are taxed.

For example, in 2017, if you are single, you pay tax on half of your Social Security benefits if your combined income is between $25 and $000. If your combined income is more than $34, you can pay taxes on up to 000% of your benefits. For married couples, when you file a joint tax return, you pay tax on half of your payments if your combined income is between $34 and $000, and 85% tax if your income is over $32.

If you convert retirement accounts into Roth-bills before retirement, you will pay conversion taxes. For example, if you converted $ 50 000 from traditional IRA в Roth iraYou will pay taxes on $ 50 000.

Once you have started receiving social security benefits, consider accepting distributions from the retirement plan after taxes, rather than the tax bill. Thus, your adjusted gross income will be lower, which may reduce a portion of your social security benefits, subject to income tax.

5. Reduce tax with charity

If you are going to give money to a charity, while you receive social security benefits, with the help of a qualified charitable distribution (QCD) you can reduce the income tax. QCD allows you to donate your required minimum of IRA directly to charity, so that it is not considered taxable income.

6. Move to another state

Фото: Depositphotos

As of 2017 year, 13 states are taxed on social security benefits:

• Colorado
• Connecticut
• Kansas
• Minnesota
• Missouri
• Montana
• Nebraska
• New Mexico
• North Dakota
• Rhode Island
• Utah
• Vermont
• West Virginia

If you were planning to retire in Florida, but you live in Minnesota, you can add tax breaks as another reason to move.

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