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2. Delay your filing as long as possible
You’re entitled to your full monthly Social Security benefit, based on your wage history, once you reach full retirement age (FRA). FRA is either 66, 67, or somewhere in between, depending on when you were born. But you don’t have to sign up for benefits once you reach FRA. In fact, for each year you delay your filing, up until the age of 70, your benefits will increase 8% — and that boost will remain in effect for the rest of your life.
Say you’re entitled to $1,500 a month in Social Security at an FRA of 67. If you wait until 70 to file, you’ll be in line for $1,860 instead.
3. House your savings in a Roth IRA
Many seniors are shocked to learn that Social Security benefits are, at times, subject to federal taxes. Basically, the more income you have outside of Social Security, the more likely you’ll be to get taxed on those benefits.
To see if that’s apt to happen to you, you’ll need to calculate your provisional income, which is your non-Social Security income plus 50% of the benefits you collect each year. You could be taxed on up to 50% of your benefits if your provisional income falls between $25,000 and $34,000 as a single tax-filer, or between $32,000 and $44,000 as a joint filer. And beyond these limits, you risk taxes on up to 85% of your benefits, regardless of your tax-filing status.