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delayed benefit

How PIA Relates to Your Benefit

How can you determine what your Social Security benefit may be if you’re not filing at your FRA? You have your PIA, but now what?

The Protective Filing Statement

Do you know how to use a protective filing statement to your advantage? It can be useful if you aren’t sure when to file for benefits.

Disability Benefits at Retirement Age

What happens at full retirement age when you’ve been receiving disability benefits all along? Do you have options?

Ah, Sweet Procrastination!

There can be significant benefit if you delay filing for Social Security. It might not be the best option for you, but it pays to understand how it works.

Should You Delay Retirement?

The question of delaying retirement may arise as you get closer to your “goal year” of when you want to retire. For some individuals’ fortunate enough to be covered under a company or state pension, it can be tempting to retire as soon as possible and collect the pension benefit. The same may be true for folks wanting to start taking Social Security at age 62. Before making the decision to retire or retire early an individual should consider the effects on delaying retirement and continuing to work. This is assuming that they can accrue extra pension benefits for the extra years of service. For Social Security, this would be delaying past an individual’s normal retirement age as long as to age 70. For example, let’s say an individual has the opportunity to be eligible to retire at age 55 and receive a pension of $5,500 per month. However, if […]

Did the Advent of 401(k) Plans Hurt Americans?

There’s been quite a bit of press lately about the recent Economic Policy Institute study (see this article “Rise of 401(k)s Hurt More Americans Than It Helped” for more), which indicates that the 401(k) plan itself is the cause of American’s lack of retirement resources.  I think it has more to do with the fact that the 401(k) plan (and other defined contribution plans) were expected to be a replacement for the old-style defined benefit pension plans, and the fact that those administering the retirement plans did little to ensure success for the employees. Traditional defined benefit pension plans didn’t ask the employee to make a decision about how much to set aside – this was determined by actuaries.  Then the company made sure that the money was set aside (in most cases) so that the promised benefit would be there when the employee retires.  In the world of 401(k) […]

A Few Things for a Single Person to Consider When Planning Social Security Filing

The decision of when to begin receiving Social Security benefits can be a bit daunting, because there are many things to take into account when making this decision. The basic concept of the lifetime value of benefits taken at various ages is the most common thing to consider, when this is really not as important as you might think.  This is especially true for single person – since the benefit reduction and increase factors are designed to achieve a similar lifetime result for the average lifespan. In other words, if you are an average person with an average lifespan, it won’t make much difference at what age you file for benefits, as you’ll receive approximately the same amount by the end of your average life, whenever you begin receiving the benefits. However. Another factor that you need to keep in mind is how Social Security benefits are treated, tax-wise.  At […]

Clarification on Questions About Spousal Benefits

Note: with the passage of the Bipartisan Budget Act of 2015 into law, File & Suspend and Restricted Application have been effectively eliminated for anyone born in 1954 or later. If born before 1954 there are some options still available, but these are limited as well. Please see the article The Death of File & Suspend and Restricted Application for more details. Since I’ve been receiving quite a few inquiries about certain aspects of the Spousal Benefit, I thought I’d put up an article with a few definitive statements about this confusing part of the Social Security system. 1.  If you are eligible for a Spousal Benefit and you’re under Full Retirement Age, when you file for your own benefit, you are automatically filing for both your own benefit and the Spousal Benefit at the same time.  This is known as the deemed filing rule. By “eligible”, we mean that […]

Why It Can Be So Important to Delay Social Security Benefits

It seems like every time I write an article about Social Security benefits that includes a recommendation to delay benefits, I get a lot of responses from well-meaning folks who disagree, sometimes vehemently, with the conclusions. There are several points of view that I see in the responses, all believing that you should start taking benefits as soon as you’re eligible: you never know how long you’re going to live; Social Security is going broke, we all know it; IT’S MINE, DADGUMMIT, THEY OWE IT TO ME; and it’s all part of a huge conspiracy; among other reasons too numerous to mention. Believe me, I have no reason to recommend that people do something that isn’t in their best interests.  As a financial planner, my job is to help folks do things that are in their best financial interests all the time.  Sometimes those things that I recommend run counter […]

Social Security Spousal Benefit Calculation Before FRA

Jane’s Double Twisted 3D stars2_rev (Photo credit: mimickr) How is the Spousal Benefit calculated?  I’ve covered this topic in several prior posts, but thought I’d give it another shot, to hopefully close this chapter for now.  I’ve heard conflicting answers from various corners of the SSA world – both personally and from reader communications.  Too often there is a pat answer that the Spousal Benefit, if taken at FRA (Full Retirement Age) is always 50% of the other spouse’s PIA (Primary Insurance Amount).  This is not always the case, if the individual has begun receiving retirement benefits based on his or her own record before FRA and then later begins receiving the Spousal Benefit. When an individual begins receiving retirement benefits based upon his or her own record has a lasting effect on the amount of all retirement benefits that this individual will receive, including Spousal Benefits.  This is due […]

Early Social Security Filing Examples

Most of the examples that you see indicate that filing for Social Security benefits as late as possible is the best way to go.  However, this is not always the case, given that you’re receiving the benefit (albeit at a reduced rate) for a longer period of time.  Let’s work through some examples to show how this works.  This article will only deal with single individuals – we’ve covered spouse benefits in several other articles, it’s time to provide some guidance for single folks. Example 1, Filing at 62 vs 66 John is single, age 62, and his benefit at Full Retirement Age (FRA) has been estimated at $2,000, so his benefit at age 62 would be $1,500, or 75% of the amount at FRA.  If he takes the benefit now, he’ll receive $18,000 per year for the next four years. (COLAs have been eliminated in this example to keep […]

Age Adjustments for Social Security

Image via Wikipedia With all the talk about how Social Security is running out of money (or will be), one of the topics that often comes up is the age limits for benefits.  As you’re aware, the Full Retirement Age (FRA) has been adjusted upward from the original age 65, gradually to age 67 for folks who were born in 1960 or later.  This upward adjustment was put into place with the 1983 amendments, ostensibly to reduce impact on the system. With that adjustment in place, and the resulting benefit that the system has received from making that change, you might wonder why some of the other age limits have not been changed.  Specifically, why has the early retirement age remained at 62, and the upper limit (maximum benefit age) has also remained set at 70? I don’t have any definitive information to back this up, but I think there […]