What is the Right Benefit Strategy in a Down Market?

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The economy has been taking some blows lately, and while there’s been some ups and downs, Social Security has remained a constant for struggling seniors. Seniors can rely on their benefits, whatever they may be, to help support them financially— but the problem is that inflation and interest can eat those benefits before we can put them to use elsewhere.

So, in a down market, what strategies can we use to help improve our benefits? Barron Magazine offers some insights into how it may be better to max out our benefits in a down market, and how to get started.

Down Market Benefits

Social Security benefits are affected by our income and our age when we claim. The younger we are when we file for our benefits, the less those benefits will be. In fact, the easiest way to considerably boost your Social Security benefits is to wait until your full retirement age or later. If a senior can wait to claim until they’re 66 or 67 (depending on the year they were born) they will receive 100 percent of their benefit. If they can hold off to age 70, they’ll receive almost 130 percent of their benefit.

In a down market, retirement savings do take a hit, and financial advisors suggest that seniors should have a cash safety net equal to one to three years’ income. That can be hard to do, and some seniors can’t afford to wait until their 70th birthday to claim their benefits. Barron’s suggestion on how to max benefits in a down market is claiming and then deferring your benefits.

Defer, Defer, Defer

Claiming your benefits when you need them can be useful and, as the market recovers and you can use other income flows, you can defer your benefits until they meet their max value. The Social Security Administration (SSA) offers a credit every month your benefits are paused. They do this until your 70th birthday. This way you can make back some of what you might have lost if you were forced to claim early.

For more retirement tips and tricks, follow along with the Council for Retirement Security

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