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.
delayed benefit
Increase Your Social Security Benefit After You’ve Filed: File and Suspend Doesn’t Have to Be All at Once
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. We’ve discussed the File and Suspend activity many times on this blog, but most of the time we refer to the activity as happening all at the same time. This is because very often we’re talking about one spouse setting the table for the other spouse to begin receiving Spousal Benefits. There is another situation where File and Suspend could be used – you could earn delayed retirement credits after you had already started receiving your retirement benefits by suspending your benefit. You must be at least Full […]
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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 […]
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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 […]
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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 […]
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How PIA Relates to Your Benefit
Image by petit1ze via Flickr If you’ve been looking into your Social Security projected benefits for long, you’ve probably run across the term Primary Insurance Amount, or PIA. Click on the link to see how the PIA is calculated if you need more background information on the PIA. What’s important to know is that the PIA is essentially the amount of your retirement benefit if you file for it exactly on your Full Retirement Age (FRA) month. But hardly anyone files for retirement benefits in exactly the month that you reach FRA. If you file for your retirement benefit before or after FRA, even by a month, there is a difference between your PIA what your benefit will be. Before FRA If you file for benefits before the month when you reach FRA, there are two factors that apply to your benefit, reducing it from the PIA amount. The reason […]
Sterling Raskie, MSFS, CFP®, ChFC®
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