Home Budgeting Retirement Formulating the best strategies to withdraw your Social Security benefits

Formulating the best strategies to withdraw your Social Security benefits

Life always gives us many opportunities to rectify our mistakes. What if we marry the wrong person? We file a divorce, sign on some papers, and then you’re free enough to walk down the aisle as many times as you wish. But as long as your Social Security benefits are concerned, you just get one chance of taking back what you did and then do it again soon. Still, you would be left with a narrow window of chance. As per the state rules of the Social Security Administration, in case you have second thoughts about reaping benefits after you apply, you are easily allowed to withdraw your claim and apply later on but you’ll only get 12 months to change your mind. Otherwise, you would have to repay all the benefits which you received.

This is why you need to claim your Social Security benefits at the right time so that they can impact your life in a good way. Check out few strategies that can help you get the maximum value out of your SS benefits.

‘Take it ASAP and continue working’ strategy

As per the rules of the Social Security Administration, you may start receiving benefits at an age as early as 62. This is indeed a good option for those who require a lump sum amount of cash during the early stage of their retirement or who wish to keep their money in tax-favored accounts for a longer time. If you wish to tap on to your Social Security income early and support it with income from a secondary job, this could reduce your benefits.

The ‘wait for it’ strategy

Although it is attractive enough to claim your due from the IRS the moment you retire officially, yet you would definitely wish to hold on to the amount for a few years. It goes without mentioning that the advantage of waiting is a bigger pay amount. The only risk associated with this is death as the longer you wait, the fewer checks you will get before you expire or retire from life.

The ‘early claim and early invest’ strategy

It is even true that if you claim Social Security at 62 years of age and live well till their 80s, you will get less in total lifetime benefits than what you would by claiming later. But this is said assuming that you are actually spending your benefits instead of investing them. If you are clever enough to invest in the benefits of Social Security, they could even grow further and the benefits you would get at 70 would be huge and a bigger one. However, before investing, be sure you’re going to receive a decent benefit from the investment.

Therefore, if you’re trying your best to ensure that you withdraw enough money from your Social Security benefits, you should follow the above-mentioned strategies. The more you follow specific techniques, the more will be the amount that you can gather without being taxed.

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