On todays show, Marc and Jim review a handful of situations single folks are encountering as they consider retirement strategies.
2:25 – Maureen heard there was a strategy that would allow her to file and suspend her benefits, allowing her to build a cash reserve that she could take at any time. She was disappointed that her financial advisor did not tell her about this strategy. Is someone leading her on? No, the claim and suspend option DID allow an individual at their full retirement age to file their application, then immediately suspend benefits. If at a later time(prior to age 70) Maureen decided she wanted to receive any portion of the benefits during this period, the Social Security Administration would send her a check for the amount, BUT she would lose the delayed retirement credits she had earned. Even without using this strategy, a retiree beyond Full Retirement Age can retroactively file for benefits as far as 6 months in the past, but claiming and suspending would allow for a longer timeframe in the majority of situations.
Unfortunately, a law was passed and this strategy is no longer useful. Now, if you file and suspend your benefit, you will no longer accrue a cash reserve, and you will also suspend benefits for anybody on your work record(spouse/children).
7:30 – Cindi has a young child who is 10, and did not know when the best time would be to take benefits. Considering children can receive benefits, are there any special considerations to take into account before filing? Of course! An unmarried child is eligible to draw a social security benefit up to the age of 18 off of their parents work record(or age 19 if still in high school). The options Cindi had to consider were whether or not to 1) collect a reduced benefit at her current age(64) to allow the child to receive a benefit, or 2) wait until full retirement age(or beyond) to receive a higher monthly benefit amount. Given these options, she would have to determine how important are the benefits when she retires, and whether or not she will continue to earn income until she retires
Can Jim predict congressional proposals to change Social Security?
14:54 – Alice decided to take her benefits at full retirement age, as her mom passed away from cancer in her late 70’s. Considering her family has had health issues in the past, she is wondering if she should have taken benefits earlier. A few things to discuss in this situation are whether or not Alice will continue to earn income until her full retirement age, or if there were specifics with her mother’s health situation that are likely to be relevant to her. She could also do a simple calculation using the average life expectancy chart at SSA.gov to help with the decision.
17:08 – Marc is single, and 64 and 5 months, when should he take his benefit? Since there is no one to collect off of his work record, he does not see the reason to wait past full retirement age to claim his benefits. Life is not guaranteed.
21:03 – Sam is currently single and has an ex-spouse who he was married to over 10 years. He still has a good relationship with his ex, and would like to maximize the survivor benefit for his ex-spouse. What are his options to maximize this benefit? He can maximize this benefit by waiting until 70 to earn the maximum amount of delayed retirement credits and thus maximize the benefit to his ex upon his passing.
22:42 – Samantha wants to collect benefits prior to turning full retirement age, but is still earning income. In this situation, how will she be able to determine any effects to her benefit? If you file benefits prior to full retirement age, and are still earning income over $18,240 annually, Social Security will hold your benefits back $1 for every $2 in income over the limit; BUT, Social Security will account for these earnings in future benefits by adjusting your reduction factor accordingly.
25:17 – Sid divorced Alex 3 years ago. Alex is not taking any benefits currently. Since Sid was born by 1/1/54, he has the option to file for a Restricted Application. Lets walk through how he can take advantage of this strategy. Sid is able to use the restricted application to file for spousal benefits off of Alex, while continuing to earn his own delayed retirement credits by waiting beyond his FRA until age 70. If Sid meets all the criteria for an independently entitled divorce spouse, he can claim spousal benefits even though Alex is not currently taking benefits.
Tune in to find out!