Social Security is one of the most important financial components of a sound retirement plan for many seniors, and yet, it is also one of the most confusing. As you get older, it is important to take a closer look at your Social Security access including what steps you can take to maximize your benefits. Our team is always available to discuss your retirement needs, including, and beyond Social Security.
It is wise to discuss your Social Security strategy with your financial planner. Here are some key areas to keep in mind.
When Should You Start Collecting Social Security?
The most common question people have with regards to Social Security is when to begin collecting. If you need the income, you might want to file for benefits as soon as you are eligible. However, the longer you wait, the more your benefits will be.
You can begin collecting Social Security retirement benefits any time between the ages of 62 and 70. If you do so at your youngest possible age, you will get the minimum amount throughout your retirement. If you wait until 66, you will get at least a third more. If you wait until 70, you will get at least three-quarters more than if you were to collect at 62.
Listen to Larry Goebel explain how you can maximize your Social Security benefits.
From Whose Account Should You Collect? Yours, or Your Spouses?
If you are married, it does not matter which of you retires first, there may be benefits to spousal support. As a married couple, you can also claim spousal benefits. Now, as noted, if you wait longer to claim your own Social Security benefit, that amount increases. This is not the case with spousal benefits. They do not increase the longer you wait.
Generally speaking, the higher wage earner should claim their benefits last as that will increase the amount they receive. The lower earner can claim benefits once he or she reaches full retirement age to see significant benefits.
GOEBEL Insurance & Financial recently helped Steve and Sue Hardgrove obtain an additional $25,000 of Social Security Retirement Benefits that they had no idea that they qualified for!!! Social Security can NOT give advice. Fortunately for the Hardgroves, we know the right questions to ask Social Security to maximize our client’s monthly benefits.How Do Survivor Benefits Fit In?
Survivor benefits from Social Security are a way to help support oneself should your spouse passes. The Social Security survivor benefit is available to those who have been married at least nine months prior to one person’s death. You can claim this benefit as early as age 60, but waiting will give you more of a claim amount. You will receive only 70 percent of the amount you could get if you file this claim at the age of 60. If you wait until your full retirement age, this amount increases.
If you have not started receiving benefits yet, and your spouse passes away, you will be able to receive more than if you have already started to receive benefits prior to their passing. Again, to maximize this, the higher wage earner should wait until age 70 before filing a claim.
Another key factor to consider is if you have both already started receiving Social Security benefits. When this happens, the higher amount of benefit will become the survivor benefit. Keep in mind, that the lower benefit amount will no longer occur.
What Are Delayed Retirement Credits?
Delayed retirement credits are a term used for delaying your claim. The longer you delay filing for Social Security, the more your claim amount will increase. It goes up a certain percentage. This is based on your date of birth as well. As noted, if you delay your claim for benefits beyond your full retirement age, you increase the amount of money you will get at that time.
For example, if you were born between 1933 and 1934, waiting 12 months will lead to a 5.5 percent increase in the amount you receive. For those born after 1943, this grows to 8 percent for every 12 months you wait. This shows that for those who do not need the income right away, waiting can be a good idea (as long as you are healthy enough to do so).
What About Disability Benefits?
Disability benefits are paid to individuals who are unable to work. There are two types of programs available. Social Security Disability Insurance (SSDI) and Social Security disability (SSI) are two different things. SSDI pays for you and some members of the family if you have worked enough to pay into the system through taxes. Most working adults pay Social Security taxes with each paycheck. For SSI, it provides funds for those who are unable to work based on financial need.
There are numerous qualification steps to obtaining disability payments. Generally, individuals who are older will not have access to disability payments but instead will begin collecting Social Security payouts when they reach retirement age. However, those who are under this age or those who have children with disabilities may qualify for funds sooner.
Can You Continue to Work? What are Your Earning Limitations?
How much can you make if you are collecting Social Security? It is a question many people ask because they want to go back to work or they may need additional financial support. Each year, Social Security sets a limit on how much you can earn. For the tax year 2017, that was $16,920 a year. If you are collecting Social Security now, and you have yet to reach your full retirement age, you will see your benefits drop by $1 for every $2 over this limit you make. For 2018, this amount is $17,040.
How Does This Coordinate with Collecting Other Benefits Such as Pensions?
Many seniors are able to collect funds from other resources such as retirement accounts and pensions. Most of the time, any type of pension or retirement income source is not going to count against your Social Security payments if you’ve reached your full retirement age.
Because Social Security is so complex, it is important to learn as much as you can about it. Work closely with a financial planner to get the insight you need on what all of your options are and when you should invest (or when you should hold off) on obtaining payments.
