Social Security Tips – May 2018

The #1 Question when it comes to Social Security Retirement:

When is the Best Age for me to start collecting my Social Security benefit?

Truth is there is no “best age”! However, most people don’t want to hear this,
they want a clear response so they can make an informed decision about this very important
decision.

The reality is that monthly benefit amounts can differ substantially based on the age one starts
receiving benefits. If you want to start benefits:

 before your full retirement age, your benefit will be smaller but you will receive it for a longer
period of time.

 at your full retirement age or later, you will receive a larger monthly benefit for a shorter period
of time.

The amount you receive when you first get benefits sets the base for the amount received
for the rest of your life.

You may want to consider the following when making the important decision on when to
file:

Are you still working?

Do you come from a long-lived family?

How is your health?

Will you still have health insurance?

Are you eligible for benefits on someone else’s record?

Do you have other income to support yourself if you delay taking benefits?

If this is something you are thinking about let’s make a plan!

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The Q&A for the month:

Question: I have a client, born in 01/1955, that has never had earned income.  Her husband, born in 10/1952, had max income for 35 years.  However, the husband passed away 3 years ago.  Wife does not need the money at this point.  What is the best way to maximize her social security benefit?

Answer: If the husband never filed for Social Security, she would receive the maximum widow’s benefit at her full retirement age. https://www.ssa.gov/planners/survivors/1945s.html

If her husband was receiving a reduced benefit prior to his death, then she may want to file sooner than her full retirement age, depending on when he filed. There’s a special rule called the “retirement insurance benefit limit” which may apply to her. The “retirement insurance benefit limit” is the maximum survivor benefit she can receive. Generally, the limit is the higher of:

  • Her husband’s reduced monthly retirement benefit that he was receiving at the time of his death, or
  • 82.5 percent of his unreduced benefit (full retirement amount) even though he elected to receive a reduced retirement benefit.

Follow Up Question: I was thinking she would have to wait until her FRA, which I believe is 66 and 2 months.  But according to your chart, she can get 100% of her husband’s benefit at age 66, since he hadn’t filed yet.

Answer: Yes, the retirement FRA and widows FRA can be different. In your client’s case, they are different. Her FRA for retirement is 66 + 2 months but her widow’s FRA is 66.

 

 

 

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