The last bastion of flexibility in Social Security claiming strategies seems to be the coordination of retirement benefits with Survivor benefits.
social security retirement
Friends With (Social Security) Benefits
Social Security is arguably one of the most important cash flows for individuals in retirement. Many individuals have paid into the system for years, and in turn will be eligible for reduced benefits as early as age 62, or at their full retirement age (between ages 66 and 67). The decision on when to start collecting benefits is important and can impact your retirement cash flows for your remaining retirement. This decision should not be taken lightly, and it should not be left to informal conversations with friends, coworkers, etc. In other words, don’t base your decision to take benefits based on what your friends have done. Your situation is different. And in most cases, your decision is final. There are several strategies that may be employed when collecting benefits. Such strategies include taking benefits early at a reduced amount, delaying benefits for a higher amount, spousal retiree benefits, and […]
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Should I Use IRA Funds or Social Security at Age 62?
Image via Wikipedia Folks who have retired or are preparing to retire before the Social Security Full Retirement Age (FRA) face a dilemma if they have IRA assets available. Specifically, is it better to take an income from the IRA account during the years prior to FRA (or age 70) in order to receive a larger Social Security benefit; or should you preserve IRA assets by taking the reduced Social Security benefits at age 62? At face value, given the nature of IRA assets, it seems like the best thing to do is to preserve the IRA’s tax-deferral on those assets, even though it means that your Social Security benefit will be reduced. If you look at the taxation of Social Security benefits though, you might discover that delaying receipt of your Social Security will provide a much more tax effective income later in life. In the tables below I’ll […]
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Social Security Changes for 2018
In 2018, there will be some slight changes to Social Security. For individuals receiving benefits, there will be a cost of living (COLA) increase of 2 percent. While 2 percent may not seem like a lot, it certainly does help. Additionally, it’s better than nothing. That is, Social Security remains one of the few retirement vehicles available with a COLA. Many defined benefit pensions (if an individual is lucky to have one) do not have COLA increases. Their payments remain fixed for the retiree’s lifetime. Individuals still working will see the wage base subject to the OASDI tax of 6.2 percent increase from $127,200 for 2017 to $128,700 for 2018. As always, the Medicare tax of 1.45 percent remains on an unlimited amount of wages, with an additional .9 percent tax added for those with incomes above $200,000 (single) or $250,000 (MFJ). For individuals receiving benefits yet continuing to work, […]
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How to Get Your Social Security Statement
One of the requests we make when doing retirement or Social Security claiming plans for clients is for the clients to bring in their Social Security statements. As many readers are aware, these statements can be retrieved online from the Social Security website. Below is a step by step process to retrieve your statement online. Go to https://secure.ssa.gov/RIL/SiView.do Click on “Create an Account” and agree to the Terms of Service Enter your personal information on the following page You will be required to answer questions related to your identity and background (be careful – answering these questions wrong will require you to call or go into the local office) Set up your account with a username and password. You should then be able to view and retrieve your statement, earning history, etc. If you’re leery of giving your personal information online, you can go into your local Social Security office […]
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Filing for Social Security Survivor Benefit alone, preserving Retirement for later
Social Security Survivor Benefits offer one of the only remaining opportunities to use timing strategies when filing for Social Security benefits. You can still restrict an application for Survivor Benefits and delay filing for your own benefits until a later, more advantageous date.
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Social Security Ground Rules
(In celebration of the release, here is an excerpt with some extras, from A Social Security Owner’s Manual, 4th Edition.) There are certain rules that will be helpful to fully accept as facts while you learn about your Social Security benefits. If this is your first reading of the list, skim through before moving on. Don’t expect to fully understand these rules on the start – but keep in mind you may need to refer back to this list of Ground Rules from time to time so you can keep things straight. Basic Social Security Rules The earliest age you can receive retirement benefits is 62. The earliest age you can receive Survivor Benefits is 60 (50 if you are disabled). Filing for any benefit before Full Retirement Age will result in a reduction to the benefits. Your spouse must have filed for his or her retirement benefit in order […]
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Book Review: Get What’s Yours
This 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 […]
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Why Social Security Decisions Are So Tough
If you’re facing the decision of when to file for your Social Security benefit, you’ve probably noticed just how confusing it can all be. There are so many decision-points in the system, it’s no wonder folks are confused. Depending on your point of view and how you count the decision-points, each person facing this decision has thousands of possible combinations to consider as they decide when to pull the trigger and file for benefits. Recently I was going over a decision tree that I had built to describe the decision-making process for filing, and within this review I have counted that for a single, there are 14 decision-points and a total of 96 months in which a filing decision can be made, for a total of 1,344 combinations.
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The Inequity of Spousal Social Security Benefits
We’ve covered a lot of ground talking about Spousal Benefits and strategies for filing, and other facts to know about Spousal Benefits. But did you realize that there is a flaw in the process that shortchanges some couples when it comes to Spousal Benefits? Here’s a pair of example couples to illustrate the inequity: The first couple: Jane has worked her entire life and has earned a Social Security benefit of $2,600 per month when she retires. Her husband Sam has been a struggling artist his whole life, as well as a stay-at-home Dad to their three kids when they were young. As a result, Sam has never generated enough income on his own to receive the requisite 40 quarter-credits to have a Social Security benefit of his own. The second couple: Sid and Nancy have both worked and had earnings within the Social Security system over their lifetimes. Sid […]
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How Adding to Your Earnings Can Increase Your Social Security Benefits
Given the way that Social Security benefits are calculated, it should come as no surprise that increasing your income over time will make a difference in your eventual Social Security retirement benefits. But how much of a difference does it make when your income is increased? Of course, this is going to depend upon what your current income is, and how many years you have left before you’ll begin receiving benefits. Keep in mind how your benefits are calculated – see this article for information about Computing Your Social Security Monthly Benefit – it’s based on your average monthly income over your lifetime. Increasing that average will increase your PIA, which will in turn increase your benefit. It’s definitely not a simple calculation to figure out what difference each increased dollar of income will have on your benefit. Let’s walk through a few examples to see how it plays out. […]
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Be Careful When Using Your Social Security Statement for Planning
Recently I received an interesting email from a reader (thanks, JRT!) that illustrates one of the problems with interpreting your statement from Social Security on a regular basis. Part of the email follows: I am just reaching 66 and have been self employed for many years. I have worked continuously for 30+ years reaching $100,000 or so per year but have been slipping into retirement and last years income dropped to $70000. SS has already reduced my monthly payment estimate. It appears that if I postpone beginning taking my SS retirement I will lose in the long term because each year I have reduced income before retiring my SS distribution will be less. For instance if I defer to 70 and have 4 years with zero income won’t I be hurting myself??? In the situation described above, what the reader is describing is the amounts he is seeing on statements […]
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How to Reduce or Eliminate Windfall Elimination Provision Impact to Your Social Security Benefit
In prior articles we have discussed the Windfall Elimination Provision (WEP) which has the effect of reducing a portion of your Social Security retirement benefit if you’ve worked in a job that was not covered by Social Security which also provides a pension. This article deals with two ways that you can remove the impact of the WEP from your benefit – neither of which is simple, and neither of which can be done after you’ve retired. The two methods are: Add years of “substantial earnings” to your record Take a lump sum distribution from your pension before you are eligible to receive the pension. Adding Substantial Earnings Years If you have the opportunity to work in a job that is covered by Social Security withholding and you have “substantial earnings” from that job, each year that you work in this SS-covered job adds to your ability to begin eliminating […]
Sterling Raskie, MSFS, CFP®, ChFC®
The latest in our Owner’s Manual series, A 401(k) Owner’s Manual, was published in January 2020 and is available on 
A Medicare Owner’s Manual, is updated with 2020 facts and figures. This manual is available on 
Social Security for the Suddenly Single can be found on Amazon at 
Sterling’s first book, Lose Weight Save Money, can be 
An IRA Owner’s Manual, 2nd Edition is available for purchase on Amazon. Click the link to choose the 
Jim’s book – A Social Security Owner’s Manual, is now available on Amazon. Click this link for the 
And if you’ve come here to learn about queuing waterfowl, I apologize for the confusion. You may want to discuss your question with Lester, my loyal watchduck and self-proclaimed “advisor’s advisor”.