Friday, August 14, 2015

Three basic steps to max out your Social Security benefits


“People who refuse to rest honorably on their laurels when they reach retirement age seem very admirable to me.” – Helen Hayes, American actor (1900-1993)

2017 Editor's note:
The Washington Post's Michele Singletary writes about when to take Social Security, click here.

 BY JULIA ANDERSON
Thinking about doing some retirement planning? Start FIRST by taking a serious look at your Social Security account.  Or maybe you don't mind leaving big money on the table as you age into your golden years.

Don’t wait until you’re 62 or full-retirement age at 66 or 67 to take a look at your Social Security options. This segment of your retirement profile deserves research and some thoughtful discussions with those who have gone before you, your family and financial advisers. Do this planning years in advance of leaving your full-time job. There's more to it than just signing up to start benefits on your own account.
 
How best to start taking benefits can depend on many variables -- your age, your marital status, if you’ve been widowed -- to name a few. (click here for my earlier post at sixtyandsingle.com - "Collecting Social Security on an ex-spouse. It's better if they're dead.")  There are ways to maximize benefits over several years!

Here’s an example: If you are a single woman 62 or older you may be able to claim benefits on a spouse or ex-spouse if you were married to that person 10 years or longer. You may be able to tap into that account while leaving your own account untouched. (Here's a recent Viewpoint report from Fidelity on Social Security and women, click here.)

This strategy has two pluses: You get some retirement money coming in and at the same time for each year that you delay taking benefits in your own account after age 62, you give yourself an 8 percent annual increase in benefits up to age 70.

But exploring the ins and outs of these options gets complicated and deserves careful investigation.

There are nearly 3,000 claiming rules related to Social Security benefits depending on your age, marital status, how long you’ve been married to someone and if they are living or dead. By looking into these options (and others), you may be able to get create a revenue stream without affecting your own account.

So how to figure this out? Do these three things:

 - Go online to www.socialsecurity.gov, set up your own personal account and look at various scenarios for how you personally can maximize benefits. In other words do your own research on benefit options. Dig down into the rules.

Then, set up a face-to-face conference at your local Social Security office to get their advice on what makes for you. Don’t do this by phone…do it in person. The phone people may not have the specific expertise you’re looking for. (How to schedule an appointment at your local office, click here.  (1-800-772-1213   M-F  7 a.m. to 7 p.m.) 
When setting up the face-to-face ask that this person be an expert in retirement planning scenarios. Bring along relevant Social Security numbers of spouses or ex-spouses.

Don’t expect the Social Security person to hand out free financial planning advice per se. What you will get is how various scenarios will work related to your age, marital history and work history. You have to know the questions to ask. They are there to answer them. Bring a note pad and take notes.

Step three: Even though you’ve already done your own research and talked directly with Social Security folks also then set up an hour-long appointment with a professional financial adviser familiar with Social Security regulations. (Make this a fee-only interview. You are paying just for their time and expertise). Make sure you’re talking to someone who really understands this stuff.

This planning should not be last minute or rushed. Make sure you understand your options. It may mean collecting tens of thousands of dollars more in Social Security benefits over the long haul.
There are ways to ease into retirement with part-time employment. There are rules around this too. So check it out.

Personally, if I have one regret about my own retirement planning, I should have waited longer to start taking Social Security benefits. After leaving my full-time job at age 63, I could have lived on my personal savings for another year or two rather than tapping immediately into Social Security. That would have boosted my monthly benefit by several hundred dollars. Translated over what could be another 20 or 30 years, we’re talking significant money.

Because so many women are on their own in their final years after the loss of a spouse, it makes sense for women to take Social Security even more seriously than men. If you are married, talk with your spouse about what your financial life will be like after your spouse is gone. Professional advisers tell me that’s a tough conversation for husbands to have.
They don’t want to think about life coming to an end.
It does.
 
For more:
"Why Women Need to think differently about Retirement," - click here.
"Women and Retirement Savings, click here.
Women's Institute for a Secure Retirement, click here.
"Key Retirement Concerns and 7 Planning Tips for Women," Forbes, click here.
6 Money Rules All Single Women Should Live By, Retirement Cheat Sheet, click here.
 
 
 
 
 
 
 
 
 
 

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