“Many American workers plan to rely on Social Security benefits as a steady source of income in retirement. If you are not on top of things, you are at risk for not using the right claiming strategy. If that happens, you could leave thousands of dollars on the table over your lifetime.” Explains Karen Price Mueller, of NJMoneyHelp.com
If you are approaching retirement, or if you’ve already retired, consider these strategies. There was recently an article discussing, “Social Security claiming strategies,” by CNBC, is worth referencing.
Prolonging Social Security payments, or stopping your checks, is one strategy that could pay off in the long term. If you claim retirement benefits at the earliest age possible (62), you take a permanently reduced benefit. It’s about 75% of what you are entitled to. However, if you wait until full retirement age (66 or 67), depending on when you were born, you’ll get your full benefit. If you delay your benefits even longer, you get an 8% bump for every year you wait up until age 70. In all, that’s a potential increase of 32%! If you already took your Social Security benefits at 62, you can still change your mind and stop the checks until you reach 70.
Another plan is to stop filing based on your spouse's record. A 2015 law permanently limited the number of retirement strategies available to beneficiaries. However, a restricted benefits application has been grandfathered in for certain claimants. The key date is January 1, 1954. If you were born on that date or earlier, you can still take advantage of this! Therefore, if you are eligible for benefits on your spouse or ex-spouse's record, you can file for spousal benefits at full retirement age and allow your own retirement benefits to grow until age 70. Even if you divorced, you could still be eligible for divorced spousal benefits if your ex dies, provided you didn’t remarry before age 60.
Finally, it’s important to note, that you can receive a penalty if you collect retirement benefits and continue to work, based on your age. If you are under full retirement age, for every $2 you earn above that threshold, the Social Security Administration deducts $1 from your benefit payments.
To learn more about Social Security claims and your retirement plans, join us for one of our FREE Workshops, where you can learn many strategies to protect you and your loved ones as you move towards retirement. Tacoma Elder Care in Tacoma, WA, is here to assist you in all your estate planning and Elder Care needs. Call us today!