Four Ways to Supercharge Your Social Security Payments

If everyone got the same Social Security payment — no matter how much they earned or how long they worked — retirement would be simple. But there are so many variations in Social Security benefits that it pays to spend some time planning how and when you will take them. Here are four decision points to consider:
* What is your target retirement age? This of course, is not set in stone. You can plan on retiring at a certain age, then change your mind. You can also choose not to take Social Security right away when you retire.
You can adjust your target retirement age based on 1) health, 2) retirement savings, 3) need to work. The big picture is focusing on your total retirement income from all sources. According to Andrew Carrillo, a Miami financial planner with Barnett Capital Advisors:
“Most Social Security maximization strategies just focus on maximizing Social Security income. That’s only looking at one side of the equation. It’s even more important to see how the different strategies to maximize Social Security benefits affect your overall income plan. It’s the net income to your household that matters most.”
* Have You Vetted Strategies that Include Your Spouse or Partner? When two people are involved, there are more combinations for income. One spouse will qualify for survivor and spousal benefits. There are a number of “switching” strategies to consider to maximize total income.
“If you’re married, analyze and understand the difference between switching strategies. There are different advanced strategies that are available for married couples. A Social Security analysis report can help identify the switching strategies that may be best for your unique circumstances,” notes Carrillo.
* What’s Your Income Gap GPS +0.26%? For many retirees, Social Security will not be enough to pay all of your bills. You need to see how pensions, savings and other retirement plans dovetail with Social Security.
“Understand your income gap by analyzing exactly what your income gap is and how it grows or contracts over your retirement is critical. This
will help you coordinate your Social Security strategy with your overall retirement income plan. This can help you understand the costs of waiting to take benefits and help you position assets correctly to fill the income gap.”

Future payouts of Social Security Benefits in the US from 2009-2083. (Source: Social Security Administration’s website. Photo credit: Wikipedia)

* Can You Wait to Reap a Higher Benefit? The government pays you the highest-possible benefit if you wait until 70, but that may not work for everyone, particularly those in poor health.
“While it’s true by waiting to take benefits until age 70 gives you the maximum annual benefit, it may not be best for your overall retirement
income plan. Be sure to analyze cumulative income benefits at certain ages and compare it to the amount of money you’ll have to pull from your
investments because that’s your opportunity cost.”
The best way to supercharge your Social Security benefit is by doing your homework. The government provides a number of calculators on its Web site. It would be also worthwhile to try a new calculator by Financial Engines.(http://www.forbes.com)
John F. Wasik is a speaker,  journalist and the author of Keynes’s Way to Wealth: Timeless Investment Lessons from the Great Economist and 13 other books. He writes regularly on personal finance and investing for Reuters, The New York Times and Morningstar.com.