Social Security Claiming Strategies Guide
Uploaded by
National Press FoundationSocial Security Claiming Strategies Guide
Uploaded by
National Press FoundationUnlocking the Secrets
of Social Security
Mary Beth Franklin
National Press Foundation
Washington, D.C.
May 19, 2014
MBF001
Timing is Everything
Knowing when and how to claim
Social Security benefits can boost
your retirement income by tens of
thousands of dollars
over your lifetime.
MBF002
For Married
Couples
The right
Social Security
claiming
strategy can
mean the
difference of
$100,000 or
more over your
joint lifetimes.
MBF003
For Singles
Your choice when to
begin Social Security
benefits depends on
your health, finances
and whether you
plan to continue
working. But if you
are divorced or
widowed, you may
have additional
claiming options.
MBF004
Your Age Matters
You can collect retirement benefits as early as 62,
but they will be reduced by 25% or more for the
rest of your life.
If you wait until your normal retirement age,
currently 66, you can collect your full retirement
benefit even if you continue to work.
Or, if you delay collecting benefits beyond your
normal retirement age, you can increase the
amount by 8% per year up to age 70.
MBF005
Whats Your Number?
Birth Year Full Retirement Age Benefit Reduction at 62
1943 1954 66 25.00%
1955 66 and 2 months 25.83%
1956 66 and 4 months 26.67%
1957 66 and 6 months 27.50%
1958 66 and 8 months 28.33%
1959 66 and 10 months 29.17%
1960 and later 67 30.00%
MBF006
Why 66 is the Magic Age
If you wait until 66* to claim Social Security, you can:
--Collect full retirement benefits
--Exercise some creative
claiming strategies
--And, avoid losing benefits
to earnings cap restrictions.
*If your normal retirement age is higher, so
is your magic age.
MBF007
Earnings Cap
Rules
If you collect Social
Security benefits
before your normal
retirement age and
continue to work,
you will lose $1 in
benefits for every $2
you earn over the
limit. For 2014, that
limit is a mere
$15,480.
MBF008
Lesson #1
If you plan to keep working, in most
cases it makes no sense to claim reduced
retirement benefits before your normal
retirement age.
MBF009
Exceptions:
Collect Social Security benefits early if:
You really need the money and are
no longer working or earn less than
the earnings cap.
Or, if youre in poor health and may
not live until your normal life
expectancy.
MBF010
MBF011
Married couples have more flexibility.
Sometimes it makes sense for the
lower-earning spouse to collect benefits
early, assuming she is no longer working
or subject to the earnings cap.
Coordinating Benefits
In most cases, it makes sense for the higher
earning spouse to delay benefits as long as
possible, up to age 70, to lock in the maximum
retirement benefit as well as the largest survivor
benefit should he die first.
The lower earning spouse may want to claim
reduced benefits early at 62, assuming she or he
is no longer working.
But theres room for a little magic in between.
MBF012
Spousal benefits = 50% of workers benefit at 66
Survivor benefits = 100% of workers benefit at 66
MBF013
Magic Strategies to Boost Benefits
File and Suspend--Triggers benefits for a
spouse but allows worker to delay collecting
his or her own benefit.
Restrict claim to spousal benefit onlyLets
you collect only your spousal benefit while
deferring your own retirement.
To exercise these magic strategies, you must
wait until 66 or later to first claim benefits.
MBF014
Bonus for Waiting
You earn 8% for every year you
delay claiming Social Security
retirement benefits beyond your
normal retirement age up to age 70.
MBF015
Who Collects Delayed Retirement
Credits?
The 8%-per-year increase in benefits
between ages 66 and 70 applies only to
the workers retirement benefit. It does
not apply to a spousal benefit.
But if he dies first, her survivor benefits
are equal to 100% of what he received
during his lifeincluding delayed
retirement credits.
MBF016
Lesson #2
Creating the largest possible benefit
for the surviving spouse should be the
main goal for most married couples.
MBF017
Survivors Can Switch Benefits
Widows and widowers can collect survivor
benefits as early as age 60, but are subject
to benefit reductions and the earnings cap
if they continue to work.
They can collect survivor benefitsequal to
100% of the deceased spouses benefit
initiallyand then switch to their own
benefit that continues to grow at 8% per
year until age 70.
MBF018
Collect on Your Ex
As long as you were married at least 10
years,
And are not currently married,
You may be able to collect on your ex-
spouses work history as early as age 62.
MBF019
Better strategy for ex-spouses
Wait until 66 and you can
restrict your claim to
spousal benefits only,
collecting half of your exs
full benefit and delay
collecting your own until it is
worth the maximum amount
at age 70.
MBF020
Do-over strategy
If you claim benefits early and then change
your mind, you have a once-in-a-lifetime
chance to suspend your benefits within 12
months of first claiming them,
repay what you have
received and restart
your higher benefits
at a later date.
MBF021
Back-up Plan
If you miss that initial 12-month window,
theres another option. Wait until 66 and you
can voluntarily suspend
your benefitsbut not repay
them and earn 8%
per-year in delayed
retirement credits up
to age 70.
MBF022
Dont forget the Kids
If you are collecting retirement benefits and you have minor
dependent children at home, they are eligible for benefits,
tooup to half of your benefit amount.
MBF023
