Tips To Help Maximize Your Benefits

You’ve paid into it, It’s your money- Now, let’s find ways to help maximize your benefits! 

We’re talking about your Social Security benefits on KOLR 10’s Ozarks Live.

A few questions come to mind when deciding when to retire and take your social security benefits.  Do you need the income? What if you don’t need income?  Do you need to quit working to take care of a family member?  Are you wanting or needing to work longer?  Are you worried you won’t live much longer? If you’re married, which spouse should start taking benefits first?

Since you have paid into the fund your entire working years it’s important to step back and look at all of the options to help maximize your benefits.  To claim your ‘full’ benefits you will need to wait until age 66 or 67 depending on the year you were born.  Claiming benefits before then will greatly reduce your benefit.  Individual benefits increase by 8% until age 70.  If you wait until age 70 you will Maximize your benefits.¹   For reasons such as health and income, most people begin to take their benefits before age 70.  

Since we can’t predict the future, the goal is to simply choose a Social Security strategy that will work out for your family regardless of how long you and your spouse end up living.  “The quality, not the longevity, of one’s life is what is important. – Martin Luther King 

Spousal Benefits

Marriage adds in many other options for a couple.  Since each situation is different, if you are married, the plan to help maximize your benefits needs to be tailored to you.  Depending on what other retirement money you have available, 401k, IRA, or a Pension, you may be able to strategize to spend that money in the years between retirement and age 70 to Maximize your benefits. Click here for more information on Spousal Benefits.  

 

If you are divorced and were married for 10 consecutive years, you have the option to claim either your own benefits, based on your earnings, or half of the former spouse’s benefits, whichever is higher, once they reach full retirement age.  

Survivor Benefits

If your spouse is deceased you are entitled to survivor benefits.  If you remarry before age 60 you lose the ability to collect from your deceased spouse’s benefits. I explain survivor benefits more in-depth here.  

Penalties

If you draw too early you may be penalized. If you are still working or earning too much income you may also be penalized.  If you earn the maximum income you could be penalized a dollar for every two dollars in earnings.

Social Security Myths

The first myth is since individual benefits increase if you wait until 70, then the spousal benefits increase also.  That is not the case, survivor benefits and spousal benefits do not increase after ‘full retirement age’ (66 or 67 years old)

A second myth I hear often is my ex-wife started drawing my benefits before I did, so my portion will be reduced.  The ex-spouse is entitled to your benefits, but it will not affect your payouts.

For The Future

In the next decade, we may see the largest drop in the worker to claimant ratio with the mass amount of baby boomers retiring.  The problem may increase with the longer life span and decline in the birth rate.  The current ratio of worker to the claimant is 3 to 1.  With these shortfalls without any infusion of money from another source, the system could face problems within the next 20 yrs or so.  My predictions for the next few years are increasing the retirement age from 62 to 65, continue the small yearly increases, and possibly changes to the survivor’s benefits.  

 

Plan ahead by gauging what your retirement benefits might look like.  Each worker can create an account at ssi.org to see their current standing and projections for what their benefits might look like down the road.  Social Security sends out printed statements every five years to those not receiving benefits, and every year to those over 60. 

If you are within 5 years of retiring, now is the time to start discussing your options with a professional.  

Contact The Resource Center

Want to learn more? Give us a call at 417-882-1800 or contact us online at any time.

Catch Bruce Porter’s show Dollars & $ense Tuesdays at 3pm on KOLR’s Ozarks Live  Visit our YouTube page for more videos

Sources: 

1- https://finance.yahoo.com/news/married-couples-81-ways-claim-150000802.html

https://www.nolo.com/legal-encyclopedia/social-security-benefits-retirement-32416.html

 

The Resource Center is an independent financial services firm that utilizes a variety of investment and insurance products. Investment advisory services offered only by duly registered individuals through AE Wealth Management, LLC (AEWM). AEWM and The Resource Center are not affiliated companies. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions.  This content is provided for informational purposes only and is not intended to serve as the basis for financial decisions.  Our firm is not affiliated with or endorsed by the U.S. Government or any governmental agency. 908885 – 5/21