Essential Steps to Secure Your Social Security Income

Financial planning in your 60s comes with a new factor: Social Security. Because you can start claiming your benefits at age 62, it’s’ important to take several steps to protect — and potentially boost — your lifetime income.

Here are five steps everyone in their 60s should take now to help ensure they make the most of Social Security.

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1. Review your benefits estimate

You don’t have to guess how much you will receive from Social Security. The Social Security Administration’s (SSA) website offers tools to calculate an estimate of how much you’ll receive from the government.

Knowing how much you’re likely to get can help you plan for your retirement overall, which may include pushing your Social Security claim date out so you can receive more income over your lifetime.

2. Audit your earnings record

Each year, your employer tells the SSA how much you’ve earned, and that data is factored into how much Social Security you’ll receive.

Log in to your account via the SSA’s website to review your earnings record. If any earnings are missing, find proof of the earnings — such as a W-2 form, tax return or pay stub — then contact the SSA.

Correcting any mistakes in your earnings history will result in new estimates about how much you will receive from the program. You can use this new information to determine if you can retire early and live off Social Security or if it is worth waiting a few more years.

3. Decide on your ideal claiming window

Your ideal claiming window depends on your financial situation. But keep in mind that if you claim as soon as you can, your benefits will be smaller than if you wait.

The longer you work, the more you’re likely to receive from Social Security when you claim your benefits. Social Security benefits automatically increase as you defer, and working extra years can boost your lifetime earnings, including across your 35 highest-earning years, which the administration considers when deciding on your benefit’s size.

Working longer also gives you more time to build your nest egg. You can make catch-up contributions and give your existing portfolio more time to grow before you have to live off it.

4. Address debt and spending habits

People claim Social Security early to keep up with living expenses, but if you can reduce those same costs, you may be able to hold off on claiming. Getting rid of unused subscriptions and reviewing your credit card statements for expenses you can eliminate may help.

5. Update your tax and investment withdrawal strategy

Some retirees live off their portfolios for a few years before claiming Social Security. This strategy gives your Social Security checks more time to grow and can potentially lower your tax bill and make your required minimum distributions (RMDs) smaller.

RMDs are a mandatory withdrawal once you hit age 73 that is equal to a percentage of your portfolio’s value each year.

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