Wiregrass Seniors Magazine February 2019 FEBRUARY ISSUE | Page 18

Social Security Q&A
Page 18
WiregrassSeniorsMagazine.com
If you claim benefits before
your FRA and continue to
work, your benefits will
be reduced by one
dollar for every two
you earn over $15,480
annually. The amount
of this cut can vary. This
Some things to keep in mind when planning your
Social Security strategy:
year, if you earned
$20,000, your benefits would
Don’t jump too soon. All too often, people are in a be cut by $2500. But if you wait until your FRA to
rush to claim benefits to get those monthly checks claim, there’s no offset: No matter how much you
coming in. Though you are eligible to receive benefits earn from your work, you get the full benefits you
starting at age 62, waiting to claim might be your have coming for claiming at that age. Now that
best move, because the longer you wait, until age people are living and working longer, waiting until
70, the larger your check will be, by 8 percent per FRA or longer to claim may be the best option.
year, not including the value of compounding — the
effect of each annual 8 percent increase on each You and your spouse together might be able to re-
previous 8 percent increase).
ceive far more money by using a claim-and-sus-
pend strategy. If you claim your benefits and sus-
This is like getting a certificate of deposit with an pend them to defer payments, your spouse imme-
8 percent annual rate (a rate astronomically higher diately becomes eligible to draw spousal benefits
than money markets have provided for years). This based on your claim, provided that he or she is at
annual increase may turn out to be more than the
least 62.
stock market returns annually in the next several years.
In addition, benefits increase annually by a cost-of-
Let’s say a man who is 66 claims his monthly ben-
living (COLA) adjustment.
efits of $3,000 per month at the age of 66 and then
suspends that benefit. His wife, who is 62, is then
And, like the benefit increases, these adjustments
accumulate year to year. How long you should wait eligible to receive $1,500 per month on his claim
after the age of 62 to claim benefits depends on vari- until she reaches FRA at age 66. In that intervening
ous factors, including your health. If you die before four years, the husband’s eventual monthly benefit
claiming, there will be no benefits for your estate or checks grows substantially, and he files to remove
your spouse. You can get a close idea of your monthly the suspension and receive his maximum benefit at
benefit check at different ages by visiting the Social age 70. At this point, his wife is 66 (FRA), and then
Security Administration’s benefits web site, and us- claims her own benefit. By using this strategy, they
ing its estimator function. If you’ve been meticulously get $1,500 a month income they otherwise never
saving your W-2 forms over the years, or if you can would have received while waiting to get a much
get access to them through your employer(s), you greater benefit for the husband.
can challenge the amount if you believe the SSA has
Some people argue that claiming as early as pos-
made an error.
sible is the best course of action because the So-
Know your full retirement age (FRA) — a designa- cial Security program may end due to financial in-
tion by the Social Security administration. For many, stability. Well, anything’s possible. But because just
depending on their personal situations, FRA may be about everyone eventually will be eligible for these
your optimum time to claim benefits. For example, if payments and has had money deducted from their
you were born between January 2, 1943, and Janu- checks since their high school jobs, ending these
ary 1, 1955, your FRA is 66. You can determine your benefits is something of a political third rail; no
FRA by consulting the Social Security website. FRA elected official wants to touch it.
is an increasingly important concept for people to
understand now that many are continuing to work And, as long as the system exists, you must know
later in life.
the rules to get the most out of it.
To Get The Most Out Of Your Social
Security, You Must Know the Rules