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For some, Social Security is their primary source of income.
For others, its merely a supplement but one that can still afford them a comfortable retirement lifestyle.
If youre starting to look toward retirement, its important to be prepared.
Here aresome things you should know about your Social Security benefits.
The FRA depends on what year you were born.
Waiting until youre older to collect benefits age 70 could get you an even higher benefit amount.
Either way, youll probably want to maximize your benefits.
Social Security calculates your benefit based on your 35 highest-earning years.
[A] big help is maximizing your earnings throughout your career.
That can also boost your benefits.
The higher your earnings, the higher your benefits tend to be.
That said, Social Security was designed to supplement retirement income, not cover the entire cost of living.
Stephen Kates, CFP and the principal financial analyst forAnnuity.org, agreed.
Use it in conjunction with your other retirement assets and income sources.
Medicare and Social Security
Medicareif a federal health insurance program for those age 65 and up.
Social Security is what enrolls you in Original Medicare that is, Medicare Parts A and B.
Like Social Security, Medicare can help you prepare for retirement, but it might not be enough.
The most important thing I stress every day is to plan for healthcare costs, Shah said.
Medicare doesnt cover all expenses.
If you miss the deadline, you may have to wait for coverage or pay alate enrollment penalty.
This involves knowing what your earnings are and what your benefits will actually be.
Withdrawing from other accounts or using a period-certain annuity can help bridge the gap.
In this case, the earnings limit is $59,520.
Wages, vacation pay and commissions do count, however.
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