You've spent the last few decades working incredibly hard for your money, now you’re nearing the opportunity to claim Social Security and it's time to make your money work for you. While 2015 will see a slight increase in Social Security payouts due to a cost of living increase, it's up to you to know how to maximize your total benefits. If it's almost time for you to start collecting your benefits, there are a few key pieces of information to keep in mind to maximize your Social Security payment.
Here are three simple ways to increase the amount of money you get paid each month from your Social Security benefits:
1. Delay Claiming Benefits Until Age 70
The easiest way to maximize your Social Security payments is with patience. While you may start taking payments by age 62, every year that you wait, your benefits will increase the total amount that you earn. Those that wait until full retirement, which is typically 66 or 67, will receive seven percent more than those that retire at 62. The government even pays you to wait a little longer after full retirement. In fact, after you hit your retirement age, the amount of your payments will increase eight percent every year you delay claiming until age 70.
2. Include Children Under 19 in Your Claim
Today, many households in the US are becoming multi-generational homes. Do you have children or grandchildren under 19 that are considered your dependents? You can claim them under your Social Security benefits. Claiming younger dependents can add one-half of your full retirement benefit up to certain annual limits.
3. Switch to Direct Deposit Before the Government Mandates It
While there was an option to receive a paper check, a prepaid debit card or sign up for direct deposit in the past, this will change in 2015. The government is eliminating paper Social Security benefit checks on March 1, 2015. However, don't wait until the deadline. Get your direct deposit set up earlier, and it will help you bypass any fees and wait time for getting your Social Security payments automatically deposited into your bank or credit union account. As an added bonus, you'll get to skip the trip to the bank!
You've worked hard for your money over the course of your career. Now it's time for you to sit back, relax, and reap some of the benefit of your dedicated years of work. Follow these three simple claiming strategies to help maximize your benefit, and you'll see the amount of your Social Security benefits increase.