Maximizing Your Social Security Benefits

Maximizing Your Social Security Benefits
Mary Beth Franklin
National Press Foundation Washington, D.C. April 8, 2013
MBF001
Timing is Everything
Knowing when and how to claim Social Security benefits can boost your retirement income by tens of thousands of dollars over your lifetime.
MBF002
For Married Couples

The right Social Security claiming strategy can mean the difference of $100,000 or more over your joint lifetimes.
MBF003
For Singles
Your choice when to begin Social Security benefits depends on your health, finances and whether you plan to continue working. But if you are divorced or widowed, you may have additional claiming options.
MBF004
Your Age Matters

You can collect retirement benefits as early as 62, but they will be reduced by 25% or more for the rest of your life. If you wait until your normal retirement age, currently 66, you can collect your full retirement benefit even if you continue to work. Or, if you delay collecting benefits beyond your normal retirement age, you can increase the amount by 8% per year up to age 70.
MBF005
Whats Your Number?

Birth Year Full Retirement Age Benefit Reduction at 62
1943 1954
1955 1956 1957
66
66 and 2 months 66 and 4 months 66 and 6 months
25.00%
25.83% 26.67% 27.50%
1958
1959 1960 and later
66 and 8 months
66 and 10 months 67
28.33%
29.17% 30.00%
MBF006
Why 66 is the Magic Age

If you wait until 66* to claim Social Security, you can: --Collect full retirement benefits --Exercise some creative claiming strategies --And, avoid losing benefits to earnings cap restrictions.
*If your normal retirement age is higher, so is your magic age.
MBF007
Earnings Cap Rules

If you collect Social Security benefits before your normal retirement age and continue to work, you will lose $1 in benefits for every $2 you earn over the limit. For 2013, that limit is a mere $15,120.
MBF008
Lesson #1
If you plan to keep working, in most cases it makes no sense to claim reduced retirement benefits before your normal retirement age.
MBF009
Exceptions:
Collect Social Security benefits early if: You really need the money and are no longer working or earn less than the earnings cap. Or, if youre in poor health and may not live until your normal life expectancy.
MBF010
Married couples have more flexibility. Sometimes it makes sense for the lower-earning spouse to collect benefits early, assuming she is no longer working or subject to the earnings cap.
MBF011
Coordinating Benefits
In most cases, it makes sense for the higher earning spouse to delay benefits as long as possible, up to age 70, to lock in the maximum retirement benefit as well as the largest survivor benefit should he die first. The lower earning spouse may want to claim reduced benefits early at 62, assuming she or he is no longer working. But theres room for a little magic in between.
MBF012
Spousal benefits = 50% of workers benefit at 66

MBF013
Survivor benefits = 100% of workers benefit at 66
Magic Strategies to Boost Benefits

File and Suspend--Triggers benefits for a spouse but allows worker to delay collecting his or her own benefit. Restrict claim to spousal benefit onlyLets you collect only your spousal benefit while deferring your own retirement. To exercise these magic strategies, you must wait until 66 or later to first claim benefits.
MBF014
Bonus for Waiting

You earn 8% for every year you delay claiming Social Security retirement benefits beyond your normal retirement age up to age 70.
MBF015
Who Collects Delayed Retirement Credits?

The 8%-per-year increase in benefits between ages 66 and 70 applies only to the workers retirement benefit. It does not apply to a spousal benefit. But if he dies first, her survivor benefits are equal to 100% of what he received during his lifeincluding delayed retirement credits.
MBF016
Lesson #2
Creating the largest possible benefit for the surviving spouse should be the main goal for most married couples.
MBF017
Survivors Can Switch Benefits

Widows and widowers can collect survivor benefits as early as age 60, but are subject to benefit reductions and the earnings cap if they continue to work. They can collect survivor benefitsequal to 100% of the deceased spouses benefit initiallyand then switch to their own benefit that continues to grow at 8% per year until age 70.
MBF018
Collect on Your Ex
As long as you were married at least 10 years, And are not currently married, You may be able to collect on your exspouses work history as early as age 62.
MBF019
Better strategy for ex-spouses

Wait until 66 and you can restrict your claim to spousal benefits only, collecting half of your exs full benefit and delay collecting your own until it is worth the maximum amount at age 70.
MBF020
Do-over strategy
If you claim benefits early and then change your mind, you have a once-in-a-lifetime chance to suspend your benefits within 12 months of first claiming them, repay what you have received and restart your higher benefits at a later date.
MBF021
Back-up Plan
If you miss that initial 12-month window, theres another option. Wait until 66 and you can voluntarily suspend your benefitsbut not repay them and earn 8% per-year in delayed retirement credits up to age 70.
MBF022
Dont forget the Kids If you are collecting retirement benefits and you have minor dependent children at home, they are eligible for benefits, tooup to half of your benefit amount.
MBF023

Maximizing Your Social Security Benefits

Uploaded by

Copyright:

Available Formats

Maximizing Your Social Security Benefits

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Maximizing Your Social Security Benefits

Uploaded by

Copyright:

Available Formats

Maximizing Your Social Security Benefits

Mary Beth Franklin

National Press Foundation Washington, D.C. April 8, 2013

For Married Couples

Your Age Matters

Whats Your Number?

Why 66 is the Magic Age

Earnings Cap Rules

Spousal benefits = 50% of workers benefit at 66

Survivor benefits = 100% of workers benefit at 66

Magic Strategies to Boost Benefits

Bonus for Waiting

Who Collects Delayed Retirement Credits?

Survivors Can Switch Benefits

Better strategy for ex-spouses

You might also like