Understanding Social Security: Considerations for Maximizing Your Benefits
When Social Security was first introduced in 1935, its primary purpose was to act as a safety net for retirees with inadequate savings, rather than serving as their main income source during retirement. Back then, life expectancies were shorter, and retirees often relied on pensions for support. However, the economic landscape of today has brought about significant changes in attitudes toward Social Security, and pensions have largely become a thing of the past. Now, Social Security benefits account for approximately 30% of retirees’ income, making maximizing your Social Security benefits a vital aspect of your retirement plan.
Before we explore different strategies for maximizing your Social Security benefits, let’s define a couple of useful terms that are specific to Social Security:
- Full Retirement Age (FRA): This is the age when you can start claiming benefits without a decrease in your monthly benefit amount. For most people, this is typically around the age of 67, but you are able to verify this on your Social Security statement.
- Primary Insurance Amount (PIA): This is the monthly benefit amount you are eligible to claim at your FRA.
Continue reading for valuable tips that can help you make the most of these benefits and build greater retirement income security.
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