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Have You Saved Enough for Retirement?

winding roadOne of the reasons that retirement funding is a mystery to most folks is the uncertainty that comes with trying to determine how much is enough – enough savings set aside so that we don’t run out of money during retirement.

The answer to this question begins with an understanding of your day-to-day living expenses, and how those expenses may change in retirement. This is a simple enough process, although it does take some effort.

The difficult part is to determine what the funding requirement is in order to provide the income you’ll need to cover your living expenses – for as much as forty years or more!

There is a rule of thumb (more on this later) that you can use to come up with a rough guess – but without using sophisticated computer modeling and analysis, your level of assuredness is limited.

According to a recent survey by the Employee Benefits Research Institute, 84% of future retirees believe that they will have plenty of savings to cover their needs in retirement. At the same time, less than one-third of those surveyed had gone through the effort to calculate how much they will need.

When looking at the actual savings numbers, only around 20% of the survey respondents had in excess of $100,000 set aside for retirement, and more than 10% indicated that they had nothing at all saved for retirement.

The rule of thumb that I mentioned before indicates that you should plan to withdraw no more than 3% to 5% each year from your retirement savings in order to not run out of money. This is what we refer to as a “sustainable rate of withdrawal”. (There are many opinions about what exactly is the appropriate sustainable withdrawal rate – at one time it was suggested that 4% is the right number, but this has been under considerable scrutiny of late. Working with the range of 3 to 5% will get you in the ballpark, nonetheless.) This equates to a requirement of $1 million in retirement funds in order to be able to withdraw $30,000 to $50,000 each year.

Don’t despair over these estimates, though. The rule of thumb is based upon 100 percent certainty, and if you happen to have that luxury, that’s fantastic. There are ways to increase your sustainable rate of withdrawal, while still maintaining a relatively high degree of certainty.

Improving the Level of Certainty

The first and possibly most important factor is to have a plan, and to monitor your plan closely. You can do this on your own, or in conjunction with a financial pro. Paying close attention to your plan and staying with it will provide you with the information in order to make certain that your plan stays on track.

Your plan should include some sort of projections or modeling to show what your future income could be based upon your sources of income – retirement savings, pensions, Social Security, and the like. This will help you to plan for your expenses in retirement – developing a budget in reverse, if you will.

Making adjustments to your portfolio holdings can have a positive impact on the level of sustainable withdrawal. It may seem to run counter to your intuition, but more risk in your holdings is good for your long-term holdings. It is important to maintain significant positions in the stock market in order to achieve a higher level of withdrawals over time. Without some exposure to risk, your funds will fall behind when compared to inflation of day-to-day expenses, not to mention high-inflation items like healthcare costs.

The third factor that can have an impact on your savings’ sustainability is the pattern of income that you’ll need in retirement. As you probably realize, over the span of the potential forty-plus year retirement, your income needs will likely change. During your first several years, you’re likely to spend considerably more than the overall average, as you travel more, take on new hobbies, and the like. Or, on the other hand you may continue to save during this time of your life.

Later on in your retirement, many folks take on lower expenses as they become more sedentary, not traveling as much and having fewer extraneous expenses. Declining health and lower energy level makes staying closer to home more attractive. In later years, health care costs can cause those expenses to increase. It is also important to maintain a realistic view of your own life span. It’s not at all unreasonable to project your retirement plan out to your late 90’s.

There are more factors that can have a positive impact on your sustainable withdrawal rate, but these are the primary ones. I want to reiterate that the most important factor is to make a plan, monitor it closely, and make the appropriate adjustments throughout your life.

What you’ll find is that, by putting some effort into developing a plan, you’ll have much more confidence in your ability to make your savings last. At the same time, if you find that you haven’t yet done enough, you have time to make adjustments in your efforts that will increase your odds.

Having made a plan, it’s also important to review and update it, on average once a year or so. This kind of review will leave you with the peace of mind that, in fact, you’re on track.

Delayed Retirement Credits for Social Security

these two dudes are delayingWhen you delay filing for your Social Security retirement benefit until after your Full Retirement Age (FRA), your future benefit increases due to a factor known as Delayed Retirement Credits, or DRCs. These credits accrue at the rate of 2/3% for each month of delay, which equates to 8% for every full year of delay.

It’s important to know a few facts about DRCs. For one – the delayed retirement credits are accumulative, not compounding. If your Full Retirement Age is 66 (if you were born between 1943 and 1954), you can accrue a full 32% in DRCs. This means that the amount of benefit that you would normally receive at FRA (which is your Primary Insurance Amount, or PIA) would be multiplied by 132% at your age 70. If your FRA is above age 66, your maximum delayed retirement credit is something less than 32% – as little as 24% if your FRA is 67.

Delayed retirement credits stop once you reach age 70, no matter when your Full Retirement Age is.

If you are delaying your benefit to achieve the delayed retirement credits and you die before reaching age 70, your DRCs stop at your death. Your surviving spouse will be eligible for a Survivor Benefit with delayed retirement credits as of the date of your death. Even if your spouse delays receiving the Survivor Benefit after your death, no more delayed retirement credits will accrue to that benefit.

For example, if you died at the age of 68 years and 6 months, your surviving spouse will be eligible for a Survivor Benefit that is 120% of your Primary Insurance Amount (PIA). If your PIA is $1,500 that means your surviving spouse is eligible for a benefit equal to $1,800.

The same is true if you decide at some point before your own age 70 to go ahead and file. I get this question every once in a while, since most examples of File & Suspend illustrate the individual doing a file & suspend at Full Retirement Age and then delaying benefits until age 70. But it’s not a requirement that you delay until age 70 – if you delay until, for example, age 67, you’ll achieve an increase of 8% since you waited a year before filing for your benefit.

You can file at any time after you’ve reached Full Retirement Age to achieve this 2/3% increase for each month. There’s no requirement to File & Suspend before filing for the delay credits either. It might be part of your strategy to File & Suspend if you’re delaying your own benefit but want to provide a Spousal Benefit for your better half. On the other hand, you might not want to File & Suspend if you plan to file a restricted application for Spousal Benefits based upon your spouse’s record.

Lastly, DRCs only affect your own retirement benefit. There are no delayed retirement credits for Spousal or Survivor benefits by delaying past FRA.

The Second Most Important Factor to Investing Success

Photo courtesy of Padurariu Alexandru via Unsplash.com.

Photo courtesy of Padurariu Alexandru via Unsplash.com.

On these very pages not too long ago, I pointed out the most important factor to achieving investing success, which is consistent accumulation. The second most important factor? Asset allocation.

Asset allocation is the process of dividing your investment “pile” into various different types of investments in an effort to maximize your exposure to the unique benefits of each type of asset class – while at the same time utilizing the risk as efficiently as possible.

When it comes to asset allocation, there are two primary factors which help to determine how you might allocate your investment assets: risk tolerance and time horizon.

Risk tolerance deals with whether or not you can sleep at night knowing that your investment could fall (or rise!) by 15%, for example. If you’re a person who feels compelled to monitor your investments every day and can’t stand it when you see a loss, you have a low tolerance for risk. If, however you recognize that it is important to take measured risks in order to achieve a better return, you may have a moderate tolerance for risk. On the third hand, if you consider the lottery, Texas Hold ‘Em, and day-trading penny stocks to be reasonable components of a portfolio, you may have an inappropriately large appetite for risk.

Risk is tempered by your time horizon. In other words, even if you’re fairly risk-averse, if your time horizon is long enough, you can (and should) take on a fairly risky allocation model. Conversely, when your time horizon is shorter, you may need to dial down the risk – even if you have a relatively high appetite for risk – the short time horizon reduces your ability to recover from significant losses should they occur.

What’s important to remember is that investing too conservatively early on in your savings career can have a drastic affect on the results. Since you have a significant amount of time for compounding to work in your favor, it makes sense to take additional risk to increase the overall return for your portfolio. With time on your side, you can afford to take a little more risk when the reward is appropriate.

At the same time, when your investing horizon is shorter, say less than five years, you can’t afford to put your funds at much risk. But this doesn’t mean that you should put your money under the mattress – inflation will eat away the buying power of your money in a short time. It’s important to maintain a degree of risk in your portfolio throughout your investing life in order to combat the impact of inflation and provide for a minimal amount of growth.

Once you determine an appropriate allocation model to follow, it makes sense to review and re-balance your portfolio about once a year – in order to make sure your allocation model is still in effect. Rebalancing more often doesn’t produce benefits to match the amount of effort and transaction costs that you would incur.

Divorcee Social Security Planning

divorcedIf you’re planning to retire and you’re a divorcee, you may be entitled to additional retirement benefits based on your ex’s earnings record.

This can be quite a boon for an individual whose ex-spouse has had a significant earnings record over his or her lifetime. Especially so, if your own benefit is lower because you didn’t work outside the home for a significant number of years.

You may be eligible for this additional benefit if you are at least age 62, your marriage lasted for at least ten years, and your ex-spouse is at least 62 years of age (and therefore eligible for Social Security benefits). If your ex hasn’t filed for his or her own Social Security benefit, the last factor is that your divorce must have been final for at least two years. If your ex has filed for benefits, this time limit is eliminated.

How Can You Plan?

So you’ve determined that as a divorcee you’re eligible for a Spousal Benefit based on your ex’s record. How can you plan? How can you determine what amount of Spousal Benefit you may have available?

Of course, a quick and easy way to know how much your Spousal Benefit might be is to ask your ex-spouse. He or she should know (or should be able to find out readily) the amount of Social Security benefits that he or she will have coming upon retirement.

But it’s often not so easy – naturally a product of divorce is a cut-off of communications, by either or both parties. Even if communicating is possible, it may be far from the desirable choice. The good news is that you don’t *have* to do it that way. You can just go to the Social Security Administration office near you to find out.

But wait a minute – you’d at least hope that the SSA folks wouldn’t just hand out personal information to just anyone who darkens their threshold, right? I mean, you can’t just walk in and ask for Social Security benefit information for another person’s record without proving that you *should* have access to this information.

Of course, there is a certain amount of information that the Social Security Administration staff will not give you – your ex’s Social Security number and address, for example. But if you prove your relationship to the ex – that is, if you can show evidence that you were married for the applicable 10 years or more, and that you are divorced – you can get some information for planning purposes.

This evidence is in the form of a marriage license and a divorce decree. Both items must be official records. In addition, if you don’t have your ex’s Social Security number, you will have to provide enough identifying information to ensure that the records requested are the appropriate ones. This identifying information includes full name, including maiden name if applicable, date of birth, place of birth, known addresses, parents’ names and addresses, and possibly other information to correctly identify your ex.

Once the record has been identified and your relationship the the individual is established, SSA may give you access to your ex’s:

  • Primary Insurance Amount (PIA) – for use in determining what your future Spousal and Survivor Benefits might be;
  • Earnings Record – for use if you believe that the PIA may be incorrect due to incorrect information in the earnings record, to pursue review of earnings record discrepancies.

Generally with the information specified above these inquiries can be made over the telephone, although in certain situations a request must be made in person.

Why Financial Planning?

Photo courtesy of Sebastien Gabriel via Unsplash.com.

Photo courtesy of Sebastien Gabriel via Unsplash.com.

I am always advocating creating a plan for your financial life – but why plan? Maybe we can identify some factors which may motivate you to develop plans for your life, incorporating financial factors with the rest of your life.

Following are some of the more important factors that you may want to think about:

  1. It is a way to prepare for the inevitable future. This fits in with one definition of planning, which is “intelligent cooperation with the inevitable.”
  2. Planning identifies problems and points the way to solutions. Taking a systematic, thorough look at the situation and thinking about the future possibilities can bring these things to light.
  3. It helps us to do first things first. In other words, it provides a rationale for assigning priorities. Should we save more for retirement, or for college? Should we pay off our home mortgage?
  4. Planning helps to coordinate your various goals with one another. For example, you need to make sure that adequate funds are being set aside for family vacations, while still putting aside funds for college and retirement.
  5. Planning can educate, involve and inform you and your family about the various goals and situations that you have to account for within your financial world. Planning can be a real eye-opener.

Now, just so that you won’t think that this concept of planning is a new idea, I recently came across the following endorsement of the concept of planning:

Suppose one of you wants to build a tower. Will he not first sit down and estimate the cost to see if he has enough money to complete it? For if he lays the foundation and is not able to finish it, everyone who sees it will ridicule him, saying ‘this fellow began to build and was not able to finish.’

Or suppose a king is about to go to war against another king. Will he not first sit down and consider whether he is able with ten thousand men to oppose the one coming against him with twenty thousand? If he is not able, he will send a delegation while the other is still a long way off and will ask for terms of peace.

In case you don’t recognize the quote, it is from the New Testament of the Bible (NIV), the book of Luke, chapter 14, verses 28-32. Obviously the concept of planning is important – considered by Jesus Christ to be what we call today a “no brainer”. That’s a pretty powerful endorsement, in my opinion.

Hopefully these factors have helped you to understand the importance of planning – and that you are inspired to begin developing your own plan. Because your life will go according to “a” plan, you might as well make it “your” plan!

Credit for Reduced Social Security Benefits When Subject to the Earnings Test

earningsContinuing to work while receiving Social Security benefits may cause a reduction to your benefit – if you earn more than the annual earnings test (AET) amount. But this reduction isn’t permanent – you will get credit for reduced Social Security benefits when you reach Full Retirement Age. So how does this work?

Earnings Test

The earnings test limit is $15,720 for 2015 if you are under Full Retirement Age for the entire year. The limit is $41,880 in the year that you reach Full Retirement Age. Full Retirement Age (FRA) is age 66 if you were born between 1946 and 1954, ratcheting up to age 67 if your birth year is 1960 or later.

So for 2015 if you were born after 1949 and you are receiving Social Security benefits, for every two dollars that you earn over $15,720, one dollar of your benefit is withheld.

For example, if you earn $20,000 in 2015 and your Social Security benefit is $500 per month, that’s $4,280 more than the limit. Your $500 benefit will be withheld for the first 5 months, in order to withhold the full $2,140. The extra $360 will be refunded to you at the beginning of the next calendar year.

The same would happen if you will reach FRA in 2015 and you earn more than $41,880. Let’s say you make $50,000 during the first half of 2015 and you reach age 66 on July 1. Since you’ve earned $8,120 more than the limit before reaching FRA, $1 is withheld for every $3 over the limit. So if your SS benefit is $1,000, in order to withhold $2,707, 3 months’ worth of benefits will be withheld.

The Payback

Once you reach Full Retirement Age, you will receive credit for reduced Social Security benefits. SSA will look at your record to determine how many months’ worth of benefits that you have had withheld due to the earnings test. Your filing age is then re-calculated, adding on those months of withheld benefits.

Returning to our example from above, you were receiving a benefit of $500 per month beginning at age 62, and over the years 15 months’ worth of benefits had been withheld due to the earnings test. At FRA, your filing age is re-calculated as if you had filed at the age of 63 years, 3 months – an addition of 15 months.

Since your original benefit was reduced by 25%, your re-calculated benefit would only be reduced by 18.33% – owing to the fact that the year between age 62 and 63 increases your benefit by 5%, and each month above 63 increases the benefit by 5/9%, a total of 15/9%, or 1.67% total. So your $500 benefit is increased to $544 per month from now forward.

Application

This reduction and payback applies to your own retirement benefit, spousal benefits, and survivor benefits. If your own benefit is withheld due to earnings over the limit, your beneficiaries’ benefits (your spouse’s or children’s benefits) will also be withheld until the reduction amount is completely covered. If you are receiving spousal benefits before FRA and are also working and earning more than the limit, only your spousal benefit is reduced due to those earnings.

Will Work After Retirement Age Increase My Social Security Benefit?

work after retirement ageThis question comes up every once in a while: Will work after retirement age increase my Social Security benefit due to the additional earnings going on my record?

The answer, as with many of these calculation-type questions, is a fully-qualified “maybe”. The amount of your earnings from work in any year may have a positive impact on your benefit – not just work after retirement age. On the downside, depending upon your benefit amount it may not be much of an increase.

The reason it’s not certain whether work after retirement age will increase your benefit is because of the nature of the calculations involved. If you’ll recall from the article on calculation of your Primary Insurance Amount (PIA) – the foundation of this calculation is a figure called your Average Indexed Monthly Earnings, or AIME. The AIME is an average of the 35 highest indexed earnings years in your working life. This is (first) calculated based upon the years between your age 20 and the year before you reach age 60.

For example, if you reach age 62 in 2015, your AIME is first calculated based on your earnings between the years 1973 and 2013. The index is based on the average of all earnings for the years prior to 2014, as compared to the average of all earnings in the year 2013. For the year 1973 in this example, the indexing figure (multiplier) is 5.9217958 – so if your earnings in 1973 were $10,000 then the indexed earnings for that year would be $59,217. Each year of earnings is multiplied by the unique index factor for your year of eligibility.

Once these figures have been determined, any years of earnings on your record at or after age 60 are added to the list as well – but earnings at or after age 60 are not indexed. These are added to the list of your lifetime earnings at face value.

Once the list of your indexed years of earnings is compiled, the amounts, indexed and face value for those after age 60, are compared and the highest 35 years are selected. This list of 35 years of earnings is then totaled and divided by 420, the number of months in 35 years – and the result is your AIME.

Armed with your AIME, you can now calculate your Primary Insurance Amount (PIA). (PIA is the foundation of all benefit calculations based on your record. PIA is the amount of benefit you would receive if you file at exactly your Full Retirement Age.)

The PIA is based upon your first year of eligibility for benefits, the year in which you reach age 62. From the year you reach age 62, income levels called bend points are defined. For our example of an individual reaching age 62 in 2015, the amount of the AIME up to $826 is multiplied by 90%; for any amount above $826 up to $4,980, the amount is multiplied by 32%; and any amount above $4,980 is multiplied by 15%. (The dollar amounts are adjusted annually, the percentages remain the same.) These three results are added together, resulting in your PIA.

So – back to the question: Will work after retirement age increase my benefit due to the additional earnings?

After the initial computation (described above), in any subsequent year that you have earnings from a Social Security-covered job, SSA takes your additional earnings and puts them into the list of years of earnings (indexed prior to age 60, face-value thereafter) and determines if the additional year’s earnings is one of the highest 35 years in your list. If this additional year replaces a lower earning year in your original list, a new AIME is calculated. Then your same bend points from your age 62 year are applied and a new PIA is developed. This recalculation is automatic, you don’t have to do anything to have the new earnings applied.

Examples

John has been working all of his adult life, from age 20 onward. He will reach age 62 in 2015. His AIME has been calculated as $5,000 this year, which results in a PIA of $2,075.70.

John continues to work past his age 62 since he has risen to the position of manager at his job and he’s just not ready to retire. John’s total earnings are $90,000 in 2015. So at the end of 2015, SSA includes the 2015 earnings in his AIME calculation. His lowest indexed earnings from prior years was $59,217 – and this amount is replaced in his “high 35” with his earnings from 2015. This results in an increase to his AIME to $5,073, and then the PIA is recalculated as $2086.60.

So – indeed, if your additional earnings are greater than one of your AIME calculation years, earning more past age 62 can have a positive impact on your benefit. However, as illustrated in the example, adding a relatively high earnings year after age 62 only increased the PIA by $10.90 per month.

Adjusting the example – if John’s earnings for 2015 are only $40,000 – this amount is less than the lowest indexed amount in his AIME list, so the AIME is not recalculated, and neither is his PIA. This is good news if you think about it. Additional earnings can only increase your benefit and cannot decrease the benefit.

If your benefit is low by comparison to the bend points for your situation as a result of low or zero earnings in one or more years used in your calculation, work after retirement age may have a larger impact.

Looking at another example, Sam (age 62 in 2015) didn’t work outside the home for the first 18 years after he reached age 20, pursuing his recording career and raising his children. From age 38 on, he dropped the recording career dream and took on a job in customer service, earning an average indexed wage over the 23 years (from age 38 to 61) of $24,000 per year. However, since Sam had many years of zero earnings in his list, his AIME is calculated as $1,314 – and his PIA is calculated as $899.40.

If Sam earns his average salary of $24,000 in 2015, his AIME will be recalculated because those earnings replace an earlier “zero” year in his list. As a result his new AIME is $1,371, and the resulting PIA is $917.70. This is an increase of $18.30 per month, almost double the amount that John’s PIA increased for earning nearly four times as much in 2015.

Social Security Earnings Test

testWhen you’re receiving Social Security benefits before your Full Retirement Age (FRA, which is age 66 ranging up to age 67 for folks born in 1960 or later), there is an earnings test which can reduce or eliminate the benefit you are planning to receive.

If your earned income* is greater than $15,720 (2015 figure), for every $2 over this limit, $1 will be withheld from your Social Security benefit. So, for example, if you earn $20,000 in 2015, a total of $2,140 in benefits will be withheld – 50% of the over-earned amount of $4,280.

If you are receiving a Social Security benefit of $1,070 per month, this means that 2 months’ worth of benefits will be withheld. This can come as a surprise if you’ve been receiving the full benefit and the earnings test is applied at the beginning of the following year, when you don’t receive a check for two months.

After you reach FRA, you’ll get an adjustment to your benefit for the withheld checks. From our example, if you had two months’ worth of benefits withheld during the 3 years before the year you’ll reach FRA, you will receive credit for the months of withheld benefits. At FRA your benefit will be adjusted as if you had filed 6 months (3 years times 2 months) later than you actually filed. So if you originally filed at age 62, your benefit will be adjusted as if you filed at 62 years and 6 months, an increase of 2.5%.

In the year that you reach FRA (but before you actually turn 66) the earnings test is much more liberal: the limit is $41,880. Plus the rule is that for every $3 over the limit, $1 is withheld from your benefits. The rule is actually applied on a monthly basis, at the rate of $3,490 per month for partial years ($1,310 for the years before you reach FRA).

*So what earnings are counted? Only earnings from employment or self-employment are counted toward the earnings tests. There is a rather long list of income types that do not count toward the earnings test – here’s a brief rundown of non-counted earnings (only for Social Security earnings test, not for income taxation):

  • deferred income (based on services performed before becoming entitled to Social Security benefits)
  • court awards, including back-pay from an employer
  • disability insurance payments
  • pensions
  • retirement pay
  • real estate rental income (if not considered self-employment, i.e., the individual did not materially participate in the production of the income)
  • interest and dividends
  • capital gains
  • worker’s compensation or unemployment benefits
  • jury duty pay
  • reimbursed travel or moving expenses as an employee
  • royalties – only exempted in the year you will reach FRA, otherwise royalties are counted toward the earnings test

Social Security Survivor Benefit Coordination

coordinatingIf you’re a widow or widower and you are eligible for Social Security Survivor’s Benefits based on your late spouse’s record, you may have some timing decisions to make that could significantly affect your overall benefits. This is especially true if you are also eligible for Social Security benefits based on your own earnings record.

Timing the receipt of benefits is, as with most all Social Security benefits, the primary factor that you can control.  If you have worked over your lifetime and you have a  becomes even more important. The decision process is dependent upon the relative size of your own Social Security benefit as compared to the Survivor Benefit based on your late spouse’s record.

Own SS Benefit Greater than Survivor Benefit  If your own benefit will be greater than the Survivor Benefit, it could be beneficial to you in the long run to take the Survivor Benefit as early as possible (as early as age 60) even though it will be reduced.  You could then continue receiving this reduced benefit for several years to your FRA (or even to age 70) and then switch over to your own benefit, which will be higher and unreduced at that point.

Survivor Benefit Greater than Own Benefit  If the Survivor Benefit is the larger of the two, you could take your own benefit early (reduced, of course) and then switch over to the Survivor Benefit later, at FRA. It doesn’t pay to delay the Survivor Benefit to a date later than your Full Retirement Age – the Survivor Benefit will not increase after that age.

By using one of these methods you are able to receive *some* benefit earlier-on in your life, and then switch over to the higher benefit later.  Just keep in mind that earnings limits and other reductions will apply.  Also, these same options are available for ex-spouse widows and widowers as well, as long as you haven’t remarried prior to age 60.

Complications with Social Security Filing for Divorcees

divorceSocial Security filing decisions are tough enough – and so is being divorced. Add the two together and you have all sorts of complications. In this article we’ll review one type of complication with Social Security filing for divorcees that can work in your favor and one that can work against you.

Let’s start with the provision that may work against you – Deemed Filing.

Deemed Filing

When you file for benefits prior to Full Retirement Age (FRA, which is 66 for folks born between 1943 and 1954, ranging up to age 67 if born in 1960), a provision called “deemed filing” takes effect. Deemed filing means that you are “deemed” to have filed for all available benefits – generally meaning your own benefit and any spousal benefit that you are eligible for as of the date of filing.

The reason that deemed filing might work against you if you’re divorced is because of the nature of eligibility for spousal benefits for a divorcee: You are automatically eligible for spousal benefits based on your ex-spouse’s record when either the ex has reached age 62 and the divorce has been final for two years, or when the ex files for his or her own Social Security benefits, whichever occurs first.

For a currently-married individual, spousal benefits are not available until the spouse has applied for his or her own benefit. Because of this, the married individual has a bit more control over his or her filing for spousal benefits, since the couple can discuss and time the two filings in order to separate retirement benefits from spousal benefits. As a divorcee you have much less control over this decision.

For example, Lou divorced her husband Ed five years ago after a 10+ year marriage. Lou is going to reach age 62 this year, and she would like to file for her own benefit now, and then delay filing for the spousal benefit based on Ed’s record until she reaches FRA, age 66. The key here is Ed’s age. If Ed is already age 62 or older, Lou does not have the option of separating her retirement benefit from the spousal benefit.

On the other hand, if Ed reaches age 62 at least in the month after Lou reaches age 62, Lou could file for her own retirement benefit any time after she reaches age 62 but before Ed reaches age 62, effectively separating her own retirement benefit from the spousal benefit based on Ed’s record.

Another way that this separation could occur is if the divorce had not occurred more than 2 years before Lou’s reaching age 62, and Ed has not filed for his own benefit prior to Lou’s filing.

So in our example, if the divorce was only finalized earlier this year and Ed has not filed for his own benefit, Lou could file for her own retirement benefit separately from the spousal benefit any time before the two-year period after the divorce has elapsed – as long as Ed doesn’t file for his own benefit before that period has elapsed.

This is also dependant upon the fact that Lou remains unmarried. So another way to separate these benefits would be for Lou to re-marry, and then file for her own benefit at any time. The remarriage nullifies Lou’s eligibility for spousal benefits based on Ed’s record. The eligibility for spousal benefits based on Ed’s record is restored if Lou’s current marriage ends (either by a subsequent divorce or death of the current spouse) – but since she wasn’t eligible when she filed for her own benefit, deemed filing did not apply and she can control when she files for the spousal benefit.

Restricted Application

On the other hand, as a divorcee you may have special treatment available to you in filing a restricted application for spousal benefits.

The restricted application is an option where an individual can, at Full Retirement Age or later, file strictly for spousal benefits only while delaying filing on his or her own retirement benefit until later when delayed retirement credits have accrued. He or she must not have filed for any Social Security retirement benefits previously.

In order for an individual to be eligible to file a restricted application, of course that person must be eligible for a spousal benefit. As a divorcee, the same rules that restricted you in the deemed filing section above have a tendency to liberate you at this stage. Since eligibility for spousal benefits is based only on the age of your ex-spouse and the time elapsed since the divorce was finalized, a unique situation is available. Both spouses could be eligible to file a restricted application.

On the other hand, for a married couple only one spouse can be eligible for a restricted application – because eligibility for spousal benefits for married persons depends on the other spouse filing for his or her own benefit. In doing so, of course this person could not file a restricted application.

Back to our example couple, Lou & Ed: Lou chose not to file for her own benefit at 62, and Ed delayed as well. When Lou reaches FRA (as long as she’s unmarried), she can file a restricted application for spousal benefits based on Ed’s record. This is because she is at or older than FRA and she is eligible for spousal benefits due to the fact that her divorce has been finalized for more than 2 years and Ed is at least age 62. Ed’s filing status doesn’t matter to her eligibility.

Maximum WEP Impact

water

Photo courtesy of Matthew Kosloski via Unsplash.com.

Rounding out our series of articles about the Windfall Elimination Provision, or WEP, I thought we should talk a bit about the maximum impact that WEP can have on you.

In other articles we’ve discussed this in part, but it hasn’t necessarily been fleshed out completely.  As you may know, the maximum WEP reduction is equal to the lesser of 50% of the first “bend point” for each year or 50% of the amount of the pension from income that was not subject to Social Security taxation. In 2015 this is $413 per month at most.

What’s important to know is that this reduction is against your Primary Insurance Amount (PIA), not necessarily against your benefit amount. Depending upon when you file relative to your Full Retirement Age, the WEP impact to your benefit could be more or less than that amount.

Wait – what?

As you may recall, the Primary Insurance Amount (PIA) is only equal to your benefit if you file at exactly your Full Retirement Age (FRA). If you file at some age (even a month) before or after your FRA, the PIA is only a foundation used to calculate your benefit. If you file before FRA, your benefit will be something less than the PIA; after, your benefit will be something more than your PIA.

So, as a result, if your PIA is reduced by the maximum WEP impact ($413 for 2015), the actual benefit reduction will be more or less than that amount unless you file at exactly your FRA.

For example, Sue has an unreduced, pre-WEP PIA (Primary Insurance Amount) of $1,500 and she is subject to the maximum WEP impact of $413. Sue is deciding when to file for her Social Security benefit – she will be 62 in 3 months, so she could file early, or she could wait until age 70 to file. Her FRA is 66 years of age.

If Sue decides to file at age 62, her benefit would be calculated as 75% of her PIA. Since her PIA is $1,500 and the maximum WEP impact is $413, her WEP impacted PIA will be $1,087 ($1,500 minus $413). Her benefit at age 62 will be $815.30 – for a dollar-reduction (maximum WEP impact) of $309.70 because if WEP had not impacted her PIA her benefit would have been $1,125.

On the other hand, if Sue decides to file age her own age 70, her benefit is calculated as 132% of her PIA – reflecting the maximum Delayed Retirement Credits. Since her maximum WEP impact-reduced PIA is $1,087 (as calculated above), her benefit at age 70 will be $1,434.80. In this case, her maximum WEP impact is $545.20. This is because if the Sue’s PIA had not been subject to the maximum WEP impact, it would have been $1,980 at her age 70.

So, the real maximum WEP impact to your benefit can be anywhere from $309.70 to $545.20 for 2015.

File & Suspend vs. Restricted Application

file & suspendThese provisions in Social Security filing are, without a doubt, the two that cause the most confusion. Being very complicated provisions and also provisions that can be very helpful to folks wishing to maximize benefits, file & suspend and restricted application are often mis-used or completely misunderstood. So at the suggestion of a reader, seeing a comment response I’d given to another reader, I will provide some additional background on just what is the difference between these two, as well as when one is used versus the other.

First of all – although it is technically possible for one person to both file & suspend and file a restricted application, typically this results in either no benefit at all or very little benefit. You should not consider both of these to be done by one person unless there are some extenuating circumstances that require it (I can’t for the life of me think of any at the moment but there’s bound to be at least one).

Here’s why:

When you file & suspend, you have established a filing date. If you have established a filing date, the only spousal benefit that you are eligible to receive is the excess – which is the spousal benefit minus your own benefit. If this turns out to be negative, you would receive no spousal benefit at all. If your intent is to delay your own benefit as long as possible you would be unnecessarily reducing the spousal benefit (or eliminating it altogether) by doing a file & suspend.

On the other hand, you can only file a restricted application if you have not established a filing date, and you can only file this at or after your FRA. By filing a restricted application, you are eligible for the full amount of the spousal benefit (50% of your spouse’s FRA-age benefit) with no reduction. Your spouse must have established a filing date for her retirement benefit to enable you to file the restricted application.

The restricted application is called so because you are applying NOT for all available benefits, but you are restricting your application to spousal benefits only. If your application is not restricted, SSA considers it an application for all available benefits as of your filing date. You would file a restricted application if you wanted to delay your retirement benefit but also receive a spousal benefit in the meantime (until you file for your own retirement benefit).

To help with understanding, have a look at this prior article File & Suspend and Restricted Application are NOT Equal. There are a few examples toward the end of the article which will likely help illustrate the differences between the two provisions.

Hope this helps to clear things up about file & suspend and restricted application – if not, let me know in the comments below!

When Does WEP NOT Impact My Social Security?

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Photo courtesy of Ståle Grut via Unsplash.com.

Recently we covered the Windfall Elimination Provision a bit more completely, including how to eliminate WEP and how WEP can impact your dependents. This prompted quite a few folks to write to me about their own situations, wondering if WEP would impact them.  So today we’ll cover those cases where you might be wondering about this, when WEP does NOT impact your Social Security.

First of all, if you have worked all your life in a job where Social Security tax was withheld, WEP does not impact your Social Security at all. This is true even if you worked in a government job – as long as your wages (earnings) were subject to Social Security tax withholding, WEP will not impact you.

As well, if you have worked and received substantial earnings from Social Security covered jobs for 30 or more years during your career, and you also have a pension coming from a non-SS-covered job, then WEP will not impact your Social Security benefit.

In addition, if you worked in a job where the earnings were not subject to Social Security tax withholding, but you didn’t work there long enough to generate a pension from those earnings, then WEP will also not impact your Social Security. This is to say, if you do not have a pension (of any type, lump sum, annuity, or other) coming from the non-Social Security-covered job, WEP does not impact your Social Security.

Also, if you are receiving a pension based on someone else’s work – your spouse for instance – that was not subject to Social Security taxation, this pension will not cause WEP impact to your own Social Security, or to a spouse benefit from Social Security. WEP is based upon a pension being received for YOUR work, and it would impact YOUR retirement Social Security benefit. In this case, the pension is not based on your work, it is based on your spouse’s work.

Another way that you could be receiving a pension from a non-Social Security-covered job where WEP would not impact you is if the pension is from a foreign (non-US) government that has a totalization agreement with the United States Social Security system. It’s highly unlikely that this situation would come about because the totalization agreement typically means that your credit in one government’s system is applied to the other government’s system and you only receive one of the pensions. I only mention this situation to complete the picture of possibilities.

Lastly, if you have received a lump sum payment of a pension from a job where Social Security taxes were not withheld, and you have lived past the actuarially-defined timespan that the pension was determined to last, then WEP will no longer impact your Social Security benefit.

I can’t say for sure that this is an exhaustive list – this is just the list that comes to mind at the moment. If you have other situations where WEP is not impacting you, please let me know in the comments section below.

How Does WEP Affect My Dependents?

Photo courtesy of Samuel Zeller via Unsplash.com.

Photo courtesy of Samuel Zeller via Unsplash.com.

We’ve reviewed how WEP impacts your own benefits in prior articles. Briefly, when you’re receiving a pension based on work that was not covered by Social Security, your own Primary Insurance Amount will be reduced by as much as $413 per month (2015 figures) or 50% of the pension, whichever is less.

But can this reduction to benefits affect my dependents’ benefits as well?

Since the nature of the WEP calculation is to reduce your Primary Insurance Amount (PIA), that means any benefit that is based on your PIA will also be reduced.

So, if your spouse is planning to receive spousal benefits based on your earnings record and your PIA is reduced due to WEP, the spousal benefit available to your spouse will also be reduced.

For example, Jennifer, age 66 was a teacher for 25 years, and her employment was not covered by Social Security taxes. In addition to her teaching job, she also worked part-time and during the summer breaks in a job that was covered by Social Security. She earned 20 years of coverage as substantial earnings, not enough to reduce WEP, but enough to generate a Social Security retirement benefit.

Jennifer’s PIA (before WEP) is $1,400 per month, and since her pension from the teaching job is $1,500, the total WEP reduction factor for her PIA is $413. Her WEP-reduced PIA is $987.

Jennifer’s husband Scott is also 66. When Jennifer files for her own retirement benefit, Scott intends to file a restricted application for Spousal Benefits. Since Scott has not filed for benefits previously, he will be eligible for a Spousal Benefit equal to 50% of Jennifer’s PIA – $493.50 (50% of $987).

See How to Eliminate WEP for details on what happens to Scott’s benefit if Jennifer dies while he’s collecting Spousal Benefits (spoiler alert: it’s an increase).

How to Eliminate WEP

Photo courtesy of ahmadreza sajadi via Unsplash.com.

Photo courtesy of ahmadreza sajadi via Unsplash.com.

If you are receiving a pension from a non-Social Security covered job and you’re also entitled to receive Social Security benefits, the Windfall Elimination Provision (WEP) may reduce your Social Security benefit. There are ways that this WEP reduction can be eliminated.

How to Eliminate WEP

As discussed in other articles, it is possible to reduce the impact of WEP by working in a Social Security-covered job and earning “substantial earnings” ($22,050 in 2015) for 21 or more years. For the first 20 years, there is no reduction to the WEP impact. For each year of substantial earnings greater than 20, the impact of WEP is reduced by 10%. When a total of 30 years of substantial earnings have been recorded on your earnings record, WEP is eliminated completely.

Another way to eliminate WEP is when the primary numberholder (the individual subject to WEP) dies. This is because WEP only impacts your PIA when you are receiving a pension based on non-covered employment. If the primary numberholder dies, she is no longer receiving the pension – therefore, WEP no longer applies. If the surviving spouse chooses to continue (or begin) receiving a Spousal Benefit, the PIA against which the spousal benefit is calculated is restored to non-WEP impact.

In addition – when a pension from a non-covered job is received in a lump sum, SSA calculates a number of years over which the lump sum would have been spread had it been received as an annuity. The recipient can eliminate WEP impact if he or she out-lives that time span determined for the deemed annuitization of the lump sum. After that time has elapsed, your PIA will be restored to the pre-WEP level.

When is Your Social Security Birthday?

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Image by freakgirl via Flickr

As you’re nearing the point when you intend to receive your Social Security benefits, it may occur to you to question just when do these milestones take effect?  Just when are you considered first eligible for benefits, when are you at Full Retirement Age, and when have you reached the maximum age? When is your Social Security birthday? (it’s not when you think)

For Social Security age purposes, the month of your birthdate is important – but that’s not the date at which you reach the milestone.  It’s actually the month after your birthday, the month when you are that particular age for the entire month.

For example, if your birthdate is January 15, 1954, you will actually reach age 62 on January 15, 2016 – but you’ll be eligible for benefits beginning with February of 2016.  Likewise, since your Full Retirement Age is 66, you will reach Full Retirement Age by Social Security’s records as of February, 2020.

The Twists

The maximum benefit age of 70 (for Social Security’s purposes) is the month that you actually have your 70th birthday. For our example, this would be January, 2024.

The other time that this doesn’t follow is when your birthdate is the first day of the month.  For Social Security purposes, when you have the first of the month as your birthdate, you are considered as having the month prior as your birth month.  See When Your Birthday Isn’t Your Birthday for more information.

To illustrate, if your birthdate is February 1, 1954, you will reach age 62 on February 1, 2016 and for Social Security benefits, you’ll be eligible for benefits on that date as well. Same goes for age 66 – you’ll reach that age on February 1, 2020 and you’re at Full Retirement Age on that date as well. You’ll reach age 70 on February 1, 2024, but for Social Security purposes you reach age 70 on January 1, 2024.

File an Extension if You Don’t Have All Your Information

extension above the clouds

Photo courtesy of Joshua Earle via Unsplash.com.

If you find yourself without all of the information to file your tax return on time, or if you just haven’t got the time to fill out the forms, you can always file for an extension of time to file.  This is an automatic extension of six months – to October 15 in most cases.

This is only an extension of the time to file your return, not an extension of the time to pay any tax due.  You should send the tax due (your estimate of course) by April 15.

In an earlier article, we covered the fact that you should file your tax return on time, even if you can’t pay. This applies here as well, but in general you should pay if you’ve calculated that you owe.

Here are seven important things you need to know about filing an extension:

  1. File on time even if you can’t pay. If you completed your return but you are unable to pay the full amount of tax due, do not request an extension. File your return on time and pay as much as you can. To pay the balance, apply online for a payment plan using the Online Payment Agreement application at www.irs.gov or send Form 9465, Installment Agreement Request, with your return. If you are unable to make payments, call the IRS at 800-829-1040 to discuss your options.
  2. Extra time to file.  An extension will give you extra time to get your paperwork to the IRS, but it does not extend the time you have to pay any tax due.  You will owe interest on any amount not paid by the April 15 deadline, plus you may owe penalties.
  3. Form to file. Request an extension to file by submitting Form 4868, Application for Automatic Extension of Time to File US Individual Tax Return to the IRS. It must be postmarked by April 15. You also can make extension-related credit card payments, see Form 4868.
  4. E-file extension.  You can e-file the extension request using tax preparation software with your own computer or by going to a tax preparer who has the software.  You must e-file the request by midnight on April 15.  The IRS will acknowledge receipt of the extension request if you e-file your extension.
  5. Traditional Free File and Free File Fillable Forms. You can use both Free File options to file an extension.  Access the Free File page at www.irs.gov.
  6. Electronic funds withdrawal. If you ask for an extension via one of the electronic methods, you can also pay any expected balance due by authorizing an electronic funds withdrawal from a checking or savings account.  You will need the appropriate bank routing and account numbers. For information about these and other methods of payment, visit the IRS website at www.irs.gov or call 800-TAX-1040 (800-829-1040).
  7. How to get forms. Form 4868 is available for download from the IRS website or you can pick up the form at your local IRS office.

File your tax return on time, even if you can’t pay

wreckSo you’re up against the deadline for filing your taxes, and when you run the final numbers you discover that you’re going to have to pay a boatload of tax. Panic-stricken, you look at your bank account and see single digits, and there’s nowhere near enough left over on payday to make the tax payment. What should you do? Go ahead and file your tax return on time, even if you can’t pay.

If you have all of the information to file a correct tax return on time, you will avoid penalties for not filing. You’ll still have penalties for not paying on time, but at least you’re not compounding the problem by adding failure to file penalties as well. (In another article we’ll cover what to do if you don’t have all the information you need to file a correct tax return by April 15.)

Recently the IRS issued a Tax Tip (2015-53) which details some information about this situation. The actual text of this Tip follows:

File on Time Even if You Can’t Pay

Do you owe more tax than you can afford to pay when you file? If so, don’t fail to take action. Make sure to file on time. That way you won’t have a penalty for filing late. Here is what to do if you can’t pay all your taxes by the due date.

  • File on time and pay as much as you can.  You should file on time to avoid a late filing penalty. Pay as much as you can with your tax return. The more you can pay on time, the less interest and late payment penalty charges you will owe.
  • Pay online with IRS Direct Pay.  IRS Direct Pay is the latest electronic payment option available from the IRS. It allows you to schedule payments online from your checking or savings account with no additional fee and with an immediate payment confirmation. It’s, secure, easy, and much quicker than mailing in a check or money order. To make a payment or to find out about your other options to pay, visit IRS.gov/payments.
  • Pay the rest of your tax as soon as you can.  If it is possible, get a loan or use a credit card to pay the balance. The interest and fees charged by a bank or credit card company may be less than the interest and penalties charged for late payment of tax. For debit or credit card options, visit IRS.gov.
  • Use the Online Payment Agreement tool.  You don’t need to wait for IRS to send you a bill to ask for an installment agreement. The best way is to use the Online Payment Agreement tool on IRS.gov. You can even set up a direct debit installment agreement. When you pay with a direct debit plan, you won’t have to write a check and mail it on time each month. And you won’t miss any payments that could mean more penalties. If you can’t use the IRS.gov tool, you can file Form 9465, Installment Agreement Request instead. You can view, download and print the form on IRS.gov/forms anytime.
  • Don’t ignore a tax bill.  If you get a bill, don’t ignore it. The IRS may take collection action if you ignore the bill. Contact the IRS right away to talk about your options. If you face a financial hardship, the IRS will work with you.

In short, remember to file on time. Pay as much as you can by the tax deadline. Pay the rest as soon as you can. Find out more about the IRS collection process on IRS.gov. Also check out IRSVideos.gov/OweTaxes.

Spousal Benefit Filing: Real World Examples

grapes

Photo courtesy of Maja Petric via Unsplash.com.

This business of filing for Spousal Benefits is complicated, as we’ve discussed in the past. The options available are difficult to understand, and the timing of the choices can make real dollar differences in benefits.

Recently I received a couple of messages from readers that illustrate very good examples of Spousal Benefit decisions in real life. I’ve changed a few of the facts to protect each reader’s identity, but otherwise these are real world examples.

I’m using these real cases because I often hear from readers (as in these cases) that their situations are just so unique that the examples provided can’t be applied. Hopefully these real-life situations will help you as well.

Restricted Application or just file for my own benefit?

This first email illustrates the great benefit of utilizing the Restricted Application instead of filing for (in this case the wife’s) own benefit. It might seem like you’re not getting much for the extra effort, but as illustrated, there’s a significant benefit to using the Restricted application:

I just finished reading your latest Social Security book, and have read your online articles about Social Security, in particular on the Restricted Application process.  I think I understand, but my husband and I don’t fall neatly into one of your examples. Most of the scenarios are for people who have not yet made a choice, or are younger.

My husband is now 73, and began taking Social Security benefits at 65, about 8 months before his FRA. We don’t know his FRA benefit amount, and haven’t found it on the SSA website. At the time he retired we were unaware of the various SS maneuvers, so he just began receiving benefits.  He currently receives $2,400/month. I will turn 65 in September, and would like to retire soon after that, and can probably wait until 66 to file a Restricted Application, but am not sure that would be the right thing for our situation. My FRA benefit amount will be $1,100, and the amount at 70 is projected to be $1,600. Since we don’t know his FRA benefit amount, it’s difficult to calculate whether or not it would be a good idea to use the Restricted App, or just start collecting.

Thanks, P

Here is my response:

Hello P –

Even though you don’t know for sure what your husband’s FRA benefit amount would be, you know that it’s at least $2,400 since that’s his reduced amount. So if you file a restricted application your spousal benefit would be $1,200 (and probably a bit more, but we’ll remain conservative).

This by itself should help you to make the decision: if your own benefit at age 66 is projected at $1,100, of course at that time if you filed you would also file for the spousal excess benefit, taking your total benefit up to our calculation of at least $1,200. So – why would you *not* file a restricted application, and take the exact same $1,200 for 4 years, and then when you reach age 70 give yourself a bonus of $400 per month?

I used your projected age 70 benefit of $1,600 minus the $1,200 to come up with $400. Your actual age 70 benefit might be a bit less since you’re retiring at age 65 and not earning any more on your Social Security record after that point. Remember that the projection at age 70 from SSA assumes you’ve worked up to that age.

I think this is a pretty clear example of how knowing what to do can really pay off – in this case to the tune of $4,800 per year once you reach age 70.

Which of us should file for Spousal Benefits?

The second email is another example of the confusion that reigns with regard to the concept of Spousal Benefits. As you’ll see, you may need to do some calculations to understand if it makes sense for one spouse or the other to file for Spousal Benefits, and the timing of those filings.

My wife is 4 years older and I am.  She reached FRA (66) in June 2014 and had enough work credits so she filed for SS and began received benefits ($800/month).  I reach FRA in June 2018 and at FRA my SS retirement benefit is projected to be $2600.  I planned to delay receiving benefits until I turn 70.  When I reach FRA the spousal benefit for my wife ($2,600 x 50%=$1,300) would be greater than the $800 she receives now based on her earned benefits.  Can she switch from her benefits to spousal benefits when I reach FRA?  If I defer my benefits until I turn 70 can I file for spousal benefits until I turn 70 and then switch to my own SS benefits?

Thanks for your help – L

And here is my response:

Dear L –

Yes, your wife can file for spousal benefits based on your SS record when you file for your own benefit. If you are at or older than FRA when you file you can suspend at that time as well, allowing your benefit to increase by the delay credits up to your age 70.  That covers your first question.

With regard to your second question, if you file for your own benefit to enable your wife to receive the spousal benefit increase described above, you will not be eligible for a spousal benefit based upon her record. On the other hand, if you do not file for your own benefit, thereby delaying your wife’s receipt of the spousal benefit increase until you reach age 70, you could be eligible for a spousal benefit based on her record when you reach FRA.

In your case, it appears to make the most sense for you to file and suspend, allowing your wife to receive a total benefit of $1,300 (50% of your FRA benefit amount of $2,600).

If you went the other route, she would continue to receive $800, and you’d receive $400, which totals to $1,200. After you reach age 70 and file for your own benefit your wife would be eligible for the increased Spousal Benefit for a total benefit of $1,300.

The first option (for you to file and suspend) will result in $100 per month more in benefits over the 4 years between your age 66 and 70 versus the second option, a total of $4,800 that you’d leave on the table.

Book Review: Get What’s Yours

get whats yoursThis book, subtitled “The Secrets to Maxing Out Your Social Security” is written by Laurence J Kotlikoff (Professor of Economics at Boston University), Philip Moeller (of PBS NewsHour) and Paul Solman (also of PBS NewsHour). With this lineup of heavyweights in the Social Security commentary space, you are right to expect a very comprehensive, easy-to-understand, explanation of the subject – and that’s just what you get.

This book covers every component of the Social Security retirement and disability benefit landscape with the aim toward taking action on those components that you have a degree of control over, in order to maximize your lifetime benefits. The authors are extremely well-versed in the ins and outs of the system, providing insights not found in many other texts.

In addition to the authors’ own lifetimes of experience in covering the subject, every fact in the book has been reviewed by former Social Security veterans for accuracy. This book is the real deal.

Get What’s Yours is conversational in style, providing many examples of real-life situations that the authors have dealt with in their own lives and those of readers/listeners in the past. Sprinkled throughout the book are examples of actual text from official Social Security rules, which are usually incomprehensible, often laughable, but these drill home the point that relying on Social Security’s official documents will leave the average person’s head spinning. This book interprets these rules so that the spinning can stop. The outcome is an excellent guide for all facets of the Social Security retirement benefit arena.

The only thing that could have improved the experience (albeit at the cost of lengthening the book considerably) would be to increase the type-size. I know many of my readers have commented on the fact that they love the 14-point font that I use in A Social Security Owner’s Manual for the ease of reading by “experienced” eyes.

With so much on the line, literally a lifetime of benefits, folks who are nearing or in the range of Social Security retirement benefit filing age can’t go wrong by investing in the valuable education provided by Get What’s Yours.