What to Do in Your 60s to Protect Social Security Income
Financial planning in your 60s comes with a new feature: Social Security. Because you can start claiming your benefits as early as age 62, it’s important to take a few steps to protect — and improve — your lifetime income.
Here are five steps everyone in their 60s should take now to make sure they’re taking full advantage of Social Security.
1. Review your benefits estimate
You don’t have to guess how much you’ll get from Social Security. The Social Security Administration’s (SSA) website provides tools to calculate an estimate of how much you will receive from the government.
Knowing how much you’re likely to earn can help you plan for your overall retirement, which may include pushing up your Social Security claim date so you can get more income over your lifetime.
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2. Check your earnings record
Each year, your employer tells the SSA how much you earned, and that data is entered into the Social Security you will receive.
Log in to your account through the SSA website to review your earnings record. If any income is missing, get proof of income — such as a W-2 form, tax return or paycheck — and contact the SSA.
Correcting any errors in your benefits history will result in a new estimate of how much you will receive from the plan. You can use this new information to decide if you can retire early and live on Social Security or if it’s worth waiting a few more years.
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3. Decide on your ideal search window
Your ideal search window depends on your financial situation. But remember that the sooner you apply, the less your benefits will be if you wait.
The longer you work, the more likely you will get more from Social Security if you claim your benefits. Social Security benefits increase automatically as you retire, and working more years can improve your lifetime earnings, including during your highest-earning age of 35, which administrators look at when deciding the size of your benefit.
Working longer hours 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. Deal with debt and spending habits
People claim Social Security early to keep up with the cost of living, but if you can reduce those same costs, you may be able to hold back from claiming. Clearing unused subscriptions and reviewing your credit card statements for charges you can eliminate may help.
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5. Revise your tax and investment withdrawal strategy
Some retirees live off their portfolios for a few years before filing for Social Security. This strategy gives your Social Security check more time to grow and may lower your taxes and make your minimum distributions (RMDs) smaller.
RMDs are mandatory withdrawals once you reach age 73 equal to a percentage of your portfolio value each year.
