Nice-Biz Article Archive

One of the most popular Social Security questions that I hear from baby boomers getting prepared for retire is "how are Social Security benefits calculated?" This is a crucial question because it could affect how long you require to work, whether you need to continue to work during your retirement years, or any other factors of your retirement plan.

Firstly, please note that you receive a Social Security retirement benefit estimate each year in the mail, normally near your birth date. There are also many calculators available on the Social Security site to assist you estimate how much your retirement benefits will be, thus you do not need to know how to calculate the benefit yourself.

It is still advantageous to know how Social Security is calculated, however, so here are the fundamentals:

Generally, your highest 35 years of earnings are listed for inflation, then averaged to figure out the basis for your monthly benefit. If you worked lower than 35 years, the missing years will be calculated as nothing for purposes of determining your benefit amount.

Planning tip: If you've near 35 years of earnings and you're near to retirement, you'll benefit greatly by continuing to work until you have 35 full years of earnings to include in your benefit calculation. Most of the people this will affect are ladies who took time off work to raise a family.

The highest 35 years of earnings are then divided by 35 to get your average indexed monthly earnings (AIME). A formula is applied to your Average indexed monthly earnings to figure out your primary insurance amount (PIA). We won't go into the specifics of the formula; the critical thing to notice is that your PIA is the completely unreduced benefit you'd receive if you retired at your full retirement age (at the age of 66 for people born between 1943-1954). This amount will be decreased if you take early retirement or increased if you retire after age 66.

The PIA is also the basis for many other benefits like spousal benefits, so it is vital to understand that your Primary insurance amount isn't always the same amount that you will receive. If you are married and your spouse will be collecting benefits according to your earnings rather than her own, then you may need to maximize your own Primary insurance amount to maximize the total Social Security benefits you & your spouse will get.

Social Security Income: Tips To Help You Get The Most Out Of Your Social Security Retirement Income
As you get closer to retirement, choosing when to take your Social Security may seem like rolling the dice. There are so many decisions to make, such as:

Submitting Your Social Security Application: When And How
As you get closer to retirement one of your top questions is probably when and how to submit your Social Security application. Should you apply at age 62 or 66? What are the steps to applying for Social Security once you've decided to start collecting retirement benefits?

Some Key Exceptional Roth IRA Withdrawal Rules That Might Help You To Take Money Out Of A Roth IRA
Roth IRAs are governed by the IRS; as such there are many Roth IRA withdrawal rules that must be followed before you take money out of your account. In this article we'll discuss Roth IRA distributions; when they can be taken, when and if they are taxable, when and if penalties might apply.

3 Reasons To Use A Fee-Only Financial Specialists
There are three different types of financial advisors: the commission broker who sells a product for a commission, the fee-based advisor who provides investment management for a percentage of the assets invested, and the fee only financial planner who provides a comprehensive financial plan for an hourly fee.

Spousal Benefits: Applying For Social Security Benefits
Can a spouse collect on her husband's social security if she reaches retirement age before her husband? No. In order for a wife to collect Social Security benefits on her husband's earnings the following requirements must be met:

3 Ways A Financial Planner Could Help You Reach Your Financial Goals And Objectives
Many people wonder exactly what a financial planner does, and how they can help you. Here are just three ways a financial planner can help you achieve your financial dreams and goals.

Completely New Guidelines Mean Much More Men And Women Doing Roth IRA Conversions In 2010
As we near the end of 2010, countless people have already done Roth IRA conversions, and many others are questioning if a Roth IRA conversion in 2010 is the right move for them.

How Could Payday Loans Help.
Have you ever found yourself in an emergency situation? Do you require a substantial amount of money fast but don't know where to get it? Payday loans may be just the thing you need.