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Best Strategies to Maximize Your Social Security Benefits

November 16, 2015

Studies show that few Americans at/approaching retirement age are aware of the benefits available to them.

Recent studies have found that not all retirement age Americans are taking full advantage of the benefits available to them. Depending on your age and marital status there are valuable benefits available —don’t miss out!

How to maximize your benefits

Your claiming age affects the amount of benefits you can receive and generally it’s worth your while to wait to claim. It is important to understand the nitty-gritty details, like:

  • The full benefit age has been 66 for years, but it will gradually rise to 67 for people born in 1960 or later.
  • Waiting until you are past age 62 to claim will increase your benefit amount by 25-30%.
  • Waiting until age 70 increases the monthly benefit by 24-32%
  • If your spouse dies, you are able to collect survivor benefits (the claiming age affects the benefit amount).
  • If your ex-spouse dies and you were married at least 10 years before splitting up, spousal benefits are still available to you.
  • If you’re eligible for more than one benefit, don’t file both at once. By claiming, say, a retirement benefit available to you at age 62, then waiting until age 66 to claim a survivor benefit, your monthly benefit amount will increase substantially.

Recent updates in Congress

On October 30th, Congress put an end to two social security filing strategies that have been widely used by couples across the country:

The file and suspend strategy involves one spouse filing for benefits and suspending them, while the other spouse files a restricted application to collect solely a spousal benefit. With this strategy, both individuals can avail themselves of delayed retirement credit. Earned benefits, then, increase by 6-8% for each year between ages 66-70 that they delay claiming. In the meantime, one spouse gets income from social security, too.

Though the new law prohibits these two strategies, it does not go into effect until 6 months after the president signs a budget bill passed by the Senate that includes the new rules. This means that if you are at or above age 66, you can still file and suspend and receive the benefits of doing so. This six month window also allows retirees age 66 or older with children either under 18, or disabled, to file and suspend to allow their children to claim benefits as dependents.

Though the process of figuring out what’s owed to you might seem daunting, it will be worth your while to consider your individual situation (age, marital status, dependent children, etc.) and how you can stand to benefit from it. If you don’t, you could be missing out on thousands of dollars and your dream retirement!

Questions? Contact us.

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