By Olivia Sandham
As mentioned in last week's post, this week we would like to start discussing “Creative Strategies to Collect More Social Security Income”. Lucky for us, one of our Family Investment Center advisors, Mrs. Elaine Coder, is our designated Social Security Specialist. I recently worked on an educational presentation with Elaine, and through that experience I gained a lot of insight into how just about anyone, in just about any situation, can use these strategies to incorporate Social Security as a key factor in their retirement plan.
Before jumping into Part 1 of 2 of our discussion about the main strategies to collect more Social Security (SS), let’s cover a few terms that we will be using throughout these posts:
Full Retirement Age (FRA): The age at which a person may first become entitled to full or unreduced SS benefits. Click here to find your FRA.
Primary Insurance Amount (PIA): The benefit amount a person would receive if he/she elects to begin receiving SS benefits at his/her normal retirement age. At this age, the SS benefit is neither reduced for early retirement, nor increased for delayed retirement. Once claimed, this PIA is what you will receive for your lifetime.
Life Expectancy (LE): The average period of time that a person can expect to live. Click here to calculate your estimated LE.
Now that we know the terms we are going to use, let’s get started discussing the first couple of “Creative Strategies to Collect More Social Security Income”:
1) Wait as long as possible to claim SS benefits: There are many advantages to waiting to claim SS benefits. First, by the taking time to research and meet with a Social Security Specialist, you ensure that you have covered all strategies and that you will be applying for the maximum PIA when it is time to claim. Second and third, by waiting to claim until you are past your FRA, your PIA will not be penalized for claiming early, and you will earn delayed retirement credits, which increases your PIA. Finally, since your PIA is adjusted based for inflation, each year you wait to claim can increase your PIA even more.
2) Claim SS benefits correctly the first time: Once you apply for your SS benefits, you only have 12 months to withdraw your application, and you are limited to one withdrawal per lifetime. There are several other “hoops” to jump through if you withdraw, including paying back the benefits you and your spouse/children received, as well as having anyone who received any of the benefits consent in writing to the withdrawal. Also, if you miss the 12-month window to withdraw or adjust your claim, you can no longer make any changes and the PIA you claim is the PIA you will receive for the rest of your life. So, if after applying and claiming your SS benefits, you find out that you missed a step or didn’t capitalize on a claiming strategy, there is nothing else to be done. Claiming correctly the very first time avoids all of these concerns.
Next week we will discuss strategies including the living spousal and survivor benefit incomes, as well as how you can combine strategies to be able to compute your overall optimal benefit. Make sure to stay tuned!
This post is for information purposes only. It is not intended for use in determining when or how to claim Social Security benefits, as benefits and strategies vary based on individual circumstances. Our firm is not affiliated with the Social Security Administration. For more information or for help determining a specific strategy for your own situation, please contact our office at (816) 233-4100, or contact the Social Security Administration directly by visiting www.ssa.gov.