RETIREMENT & ESTATE PLANNING 2014 • PAGE 3
You’ve earned it, so don’t you deserve as much Social Security benefit as you can get? “You can absolutely maximize your Social Security benefit,” said Robin Brewton, vice president of client services with Social Security Solutions, a company that provides tools and education to help people figure out when to claim benefits. Deciding when to claim is one of the largest financial decisions a person will make in his or her lifetime, and alarmingly Americans are not getting billions of dollars in lifetime income because they’re not well informed about the choices available to them, Brewton said.“Using optimal claiming strategies, a married couple can add $150,000 compared to the common strategy of both spouses claiming at age 62,” Brewton said.
Delay when possible
For most people, it’s beneficial to delay benefits if possible, said certified public accountant Angela S. Deppe, founder of SocialSecurityCentral.com. Even working one year longer can increase benefits by 8 percent. “Seventy-four percent of Americans take their benefit early, losing out on thousands of dollars that they worked hard for. Between ages 62 to 66, which is full retirement age for most people, you can gain up to 25 percent more. And between ages 66 to 70, you can gain as much as 32 percent more,” Deppe said.A good example from the government’s Social Security website, ssa.gov: “A $1,000 benefit at full retirement age 66 shows that if the benefit is taken early at age 62 the benefit is then reduced to $750. If the benefit is delayed and taken at age 70, the benefit is $1,320. That’s nearly double what it was if taken at age 62. Ouch!” said Deppe.Another reason to strategize Social Security is to maximize
“Everyone should verify their best 35 years of income with the SSA. This is especially important for women who took time away from working to raise their kids. Since Social Security statements are no longer mailed out, this can be done online at www.ssa.gov.”
—Angela S. Deppe, founder of SocialSecurityCentral.comyour spouse’s survivor benefit. After the death of a spouse, the survivor continues to earn benefits based on the higher earner’s record, Brewton said. This strategy is especially important if the income gap between spouses is wide, Deppe said. “If the higher earner delays his collection past full retirement benefit and receives these boosts or delayed retirement credits of up to 32 percent, this increased amount is then passed along to the surviving spouse after his death through the survivor benefit. This amount could be large if the higher-earning spouse passes away several years before the lower-earning spouse,” Deppe said.
Make sure info is accurate
Getting the most out of Social Security is not just about when you claim benefits. You also need to be sure you’re getting the proper benefits. “Check with Social Security to make sure your earnings are accurate and review your earnings history. When you’re ready to claim benefits it’s difficult to correct problems that may have happened years ago,” Brewton said. Gaps in reporting or mistakes do happen, especially with small businesses, she said.Deppe said, “Everyone should verify their best 35 years of income with the SSA. This is especially important for women who took time away from working to raise their kids. Since Social Security statements are no longer mailed out, this can be done online at www.ssa.gov.” The website is a helpful tool, but be aware that the Social Security Administration is prevented by policy from giving advice, Brewton said: “They are trained to tell you how to get the most benefit today, not in the long run. If you don’t know your numbers, you don’t know what’s best for you.”Social Security is complicated, with literally thousands of rules, but there’s plenty of help out there, including free online worksheets, low-cost software and higher priced consultants. “Isn’t it worth spending $20 or $50 to get $150,000?” Brewton said.
By MElissa ERickson | MoRE contEnt noW