Monday, July 13, 2015
Social Security Snapshot
By: Jeris Gason is a CERTIFIED FINANCIAL PLANNER™ and a Chartered Retirement Planning Counselor®. with Bridgeworth, LLC
Social security benefits are an important piece of the financial planning picture and are frequently a hot topic around many an office water cooler, but it’s important to understand the ins and outs of this retirement income benefit and how it fits into your overall financial plan. More important than when you take social security is how you take it, so let’s discuss a few non-traditional social security benefit options available.
• The “Phase-In” Strategy: This strategy works between spouses and is used most often when there is an income gap between the two. The lower earning spouse may begin taking their reduced benefit at age 62, while the higher earning spouse restricts their application and collects a spousal benefit only at their full retirement age. This allows the higher earning spouse to delay their benefit until age 70 in order to receive the 8% delayed retirement credit up to four years.
• The “File & Suspend” Strategy: This strategy allows for benefits at full retirement age with the opportunity for those benefits to grow over time. This works when the higher earning spouse files for benefits and suspends receipt of said benefits until age 70. By doing this, the lower-earning spouse is eligible to receive a spousal benefit. At age 70, the higher earning spouse collects their own benefit which has benefited from the 8% delayed retirement credit for up to four years.
• If you are widowed, there are different rules for social security. You can collect survivor benefits at age 60 (age 50 if disabled). These benefits are based on your age and your deceased spouses’ social security benefit. If you remarry after you reach age 60, your new married will not affect your ability for survivors’ benefits. If your own benefits are higher, you can switch to those as early as age 62.
• Divorce & Remarriage: If your marriage lasted for ten or more years, you are eligible for spousal or survivorship benefits. If you begin receiving benefits based on your ex-spouse’s record, it does not reduce their personal benefits or the benefits of his/her new spouse if he/she remarried. If you remarry, you forfeit the Social Security benefits on your prior spouse. There are a few exceptions here, but the main idea is that you cannot claim benefits on two spouses at the same time.
For more about financial planning, the strategies above, or to learn about more options when it comes to claiming your Social Security Benefits, contact Jeris Gaston, at firstname.lastname@example.org .
Jeris Gason is a CERTIFIED FINANCIAL PLANNER™ and a Chartered Retirement Planning Counselor®. She has been advising clients since 2007 in the areas of wealth accumulation, retirement planning, education planning, investment management, and comprehensive financial planning.
Bridgeworth, LLC is a Registered Investment Advisor.
This commentary is provided for information purposes only and does not pertain to any security product or service and is not an offer or solicitation of an offer to buy or sell any product or service. Investors should consult their Financial and/or Tax Advisor before making any investment decision.