Even with savings and a pension or IRA in place, most couples rely on Social Security benefits after retirement. Luckily, accountants are able to help a couple maximize their benefits by making strategic choices based on their personal circumstances. Here are a few of the most valuable strategies to implement in your Social Security planning process. 

How to Effectively Plan for Social Security 

1. Wait Until Full Retirement Age

Depending on your birth year, a person can collect the full monthly amount of their retirement benefit between the age of 66 and 70. Individuals can claim Social Security as early as 62, but they only receive a fraction of the total amount. By following this path, you face decreased benefits for yourself and your spouse because you accept a permanent reduction. However, if you both choose to delay collection until your full retirement age, the benefits grow, allowing you to potentially increase the overall total collection. 

2. Consider Health Issues

While waiting longer is usually better, the exception to the rule is couples with potentially shorter retirement periods. The financial gains offered by deferring benefits are usually only reaped after at least one spouse reaches their mid- to late-80s. If health woes have shortened both individuals’ life expectancies, collecting Social Security early is often the best method to maximize benefits. 

3. Delay Claiming for the Higher Earner

If pushing retirement off isn't feasible, or the additional income is needed, it's typically best for the partner with the lowest average income to claim first. A person's Social Security benefits are factored based on their 35 most profitable working years. Since lower earnings result in a lower monthly benefit amount, the reduction for collecting early is less of a financial loss. The Social Security Administration provides an online estimator, but for a more accurate figure, work with an accountant to determine which partner should apply and which one should delay their benefits. 

Do you need assistance with Social Security planning? Turn to Donna J Troutman, CPA, PC, in Lewisburg, PA. Their certified public accountant firm offers a range of superior tax preparation and consulting services to residents and businesses across Union County. Learn more about their areas of expertise online and call (570) 523-7337 to schedule a personalized consultation.