Social Security benefits are one of the most important parts of any retirement portfolio. A poor claiming decision can cost tens-of-thousands of dollars, while making the right decision can contribute significantly to one's financial security.
However, Social Security is a complex system. I provide the tools to help you make the best Social Security planning. My reports present not only the optimal strategy, they also provide comparisons to other strategies that may work better when your entire financial situation is taken into consideration. My reports also help you advise about little-known Social Security strategies such as 'file and suspend' and the restricted application, 'free spousal' strategy.
Your primary insurance amount, or PIA -- the benefit you would get at full retirement age -- determines the size of your monthly retirement check. According to the Social Security Administration's website, the PIA is based on the Average Indexed Monthly Earnings, or AIME, as applied to an inflation-adjusted formula. The PIA is then adjusted for whether you take retirement before or after your normal retirement age -- 66 for those now reaching retirement age, but gradually adjusted to age 67 for those born after 1960.
You can begin drawing reduced Social Security as early as 62. For every month you delay after reaching full retirement age, up to age 70, the monthly benefit increases.
According to a 2010 report of the Senate Special Committee on Aging, for someone with an AIME of $5,000 in 2010, the PIA would total $1,971.
In keeping with the original intent behind Social Security -- a way to lift seniors out of poverty -- lower-wage earners get a higher proportion of their earnings than higher-wage earners. The maximum monthly benefit that can be received in 2014 is $2,642 for a worker retiring at full retirement age.