Creative Strategies to Collect More Social Security Income (Part 2 of 2)

By Olivia Sandham
 

Continuing from last week’s post, this week we will finish our discussion on “Creative Strategies to Collect More Social Security Income”.  Before jumping into Part 2 of 2, we recommend revisiting last week’s post for an overview of the terms FRA and PIA.
 
Besides 1) Waiting as long as possible to claim Social Security (SS) and 2) Claiming SS benefits correctly the first time, here are a few other creative strategies you could implement to collect more SS income:
 
3)  Harness the power of the little-known Spousal Income Benefit:  Once one spouse is eligible to receive SS benefits, the other spouse may be eligible to get up to 50% of those benefits as well, until claiming his or her own SS benefits.  This option is also available to divorcees as well.

• The Spousal Income Benefit is available to the second partner regardless of whether the first partner is actually collecting benefits or has decided to file and suspend.
• The Spousal Income Benefit will be available to the second partner once he or she reaches the age of 62, but will be available at a reduced/pro-rated amount until he or she reaches FRA.  At FRA, the second partner can receive 50% of the first partner’s PIA.
• It is important to note, once the second partner starts collecting the Spousal Benefit Income, the amount he or she claims is the amount of Spousal Benefit that will be received for the rest of his or her lifetime, until claiming his or her own SS benefits.  Once claiming his or her own SS benefits, the second partner will receive the higher benefit of the two.

4) Plan for the Surviving Partner’s Income Benefit:  Widows or widowers may be entitled to receive a portion of their deceased partner’s SS benefits, which may be increased by using the previous strategies.  Click here to see how much surviving family members would receive.  As a side note, the Social Security Administration should be notified as soon as possible when any family member passes away, because there are several other ways that Social Security can help you when a family member dies.
 
5) Compute your optimal benefit amount:  Rather than picking one or two strategies to increase your SS benefits, finding the right combination of all the strategies discussed for your situation can be advantageous in figuring out how to collect more SS income.  Since Social Security rules are very intricate and every situation for every family is different, meeting with a Social Security specialist would be your best way to use this strategy.

 

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.

AARP Retirement Calculator: Are You Saving Enough?

Are you looking for a fun, free, and easy method to try estimating your retirement? We discovered the AARP Retirement Calculator, a neat online device that can make thinking about your future and retirement a little more enjoyable. Using the calculator can be a great way to check if the plan you currently have for your financial future should allow you to retire when and how you want. Discover all your options and how the choices you make today and in the near future could ultimately affect your retirement finances!

Before using the calculator, we encourage you to read our list of “Pros and Cons of Using the AARP Retirement Calculator”:

PROS:

• Using this calculator can be a good starting checkpoint to see if you are currently on track for retirement, currently way off track for retirement, or somewhere in between.
• After inputting your information, click on “Options” to see what changes you can make in retirement to help you have more income available if needed or desired.
• At any point, you can also go back to the “About You” section and change answers, allowing you to see how different choices starting now could possibly affect how much income will be available to you in retirement. This can be a helpful tool if you are able to actually implement some of these changes in your life, such as how much of your income you and your partner save for retirement each year.
• When deciding your lifestyle in retirement, click on “Learn more about Retirement Lifestyle Assumptions” and you can manually input what percentage of your current lifestyle expenses you plan to have in retirement.

CONS:

• The calculator does take into consideration the multitude of creative ways you can collect more Social Security income (to be discussed in next week’s blog!)
• The calculator cannot substitute for the valuable knowledge and experience of a financial advisor. This tool should only be used for fun to see where you are at now and how different decisions could affect your future outcome, but make sure you discuss any officially changes in your retirement plans with your financial advisor.

Think you’re ready to give it a try? Click here to Get Started.

Retirement Plan Gone Awry: What Do I Do Now?

By Olivia Sandham 

Type the word “retirement” into any search engine and you’ll be directed toward hundreds of web pages, articles, and videos presenting advice on how to save and invest for your retirement.  But what if you’ve already been retired for several years, you are already collecting Social Security, and after taking a closer look, you begin to realize that you will soon be outliving your retirement fund?  You may have planned ahead by saving and investing for decades pre-retirement, but somehow it simply hasn’t been enough to cover your expenses post-retirement.  Although this can be an overwhelming realization, there are several options available, many of which do not require financial expertise.  With a little motivation and “Thinking Outside the Box”, you can remain financially secure throughout retirement.

Option 1:  Re-enter the workforce.  Although you may not be as energetic as you once were, consider finding simple work for modest pay.  Think Outside the Box:  This job does not have to be a traditional position.  For example, parents are happy to pay for a reliable person to watch their children, and grown children are happy to pay for a reliable person to help tend to aging parents.  If you work in a more traditional position, you might be entitled to free services or discounts which could work in your favor during retirement as well.

Option 2:  Offer your knowledge or skills.  After decades of working you most likely picked up a few tips and tricks along the way, which someone may be seeking.  Advertise with your local newspaper offering your services as an informal mentor or advisor in fields in which you have some expertise.  Think Outside the Box:  If you don’t have money to spend on a newspaper ad, ask your local shopping markets and retailers if you can post a sign or flyer for free.  And of course, spread the word with your family and friends.

Option 3:  Prioritize your spending.  It’s easier to stay financially viable during retirement if you are paying attention to your expenses.  Look for deals on needed items, lessen finances spent on clothing, entertainment, and travel, and watch out for spending too much on loved ones.  Think Outside the Box:  Some not-so obvious changes in spending patterns that can make a difference during retirement.  These include using liquid forms of payment (cash, check, debit card) rather than racking up interest bills on credit cards, buying generic rather than name brands, and doing any necessary shopping at church/charity stores.  Any of these adjustments can certainly add up in your favor over time.

Option 4:  Turn your assets into cash.  You may own a home, car, valuables, or life insurance policies which could be converted into liquid assets.  Think Outside the Box:  Converting to liquid assets doesn’t always mean the asset has to be sold.  A reverse mortgage may allow you to withdraw equity from your home without having to move.  Also, consider the possibility of renting out a room in your house, or even consider renting your entire house and living with friends or relatives, or in a modest apartment.

Option 5:  Re-invest and re-grow your nest egg.  Once you follow the previous suggestions, you might start to find extra finances available.  Rather than spending or only saving these funds, stay on track with what you have been doing and look into ways to reinvest your small amounts of income.  Just because you are retired does not mean you can’t continue to grow your nest egg.  Think Outside the Box:  Traditional thinking says the older we are, the less risky our investments should be.  However, since you do not have as big of a nest egg as you did years ago, investing with a little more risk tolerance might create more growth.

Option 6:  Get by with a little help from your friends.  It can be tough to ask people for help, since most of us like to feel independent, and having to explain that we fear outliving our savings can seem embarrassing.  However, it is very likely that you have a lot of people in your life that would be happy to help, even for a short period of time.  They can be friends or family.  This is not the time to be stubborn with pride; rather this is the time to be smart and reach out to others.  Think Outside the Box:  Look into retirement resources and services available within your community, such as services provided at your local church or within a nearby retirement community.

Option 7:  Get in touch with an expert.  Expert financial advisors might take a peek into your assets, liabilities, income, and expenses and give you a better picture of what changes you need to make.  Experts may also be able to help you make adjustments in your investments or assets which you may not have otherwise been aware were options for you.  Think Outside the Box:  If you don’t have the funds to seek ongoing expert advice, at the very least try to find a non-profit firm or government agency who would be willing to offer a short analysis for free.  It doesn’t hurt to make a phone call and ask.  And as always, make sure to utilize your network of friends and family to see if they know anyone who might be willing to help.  Good luck!