Life is a bucket of choices….some are easy, some not so much. But we all must make more seriously choices that will have a lifetime of consequences. Agreed? Well, that is what you are looking at when you make a decision on your Social Security benefit….basically a permanent decision.
We are going to share with you in this article a real situation…..middle America, both spouses working for most of their lifetime, just trying to keep their heads above water, raising those kids and now approaching retirement. They need to get every penny they are entitled to, so that is where Pillars LLC steps in to advise.
FULL RETIREMENT AGE BENEFIT – JOHN ($2193) SUSIE ($1387) John is 65 and Susie is 63 – their life expectancy is normal, being 85 for John and 88 for Susie.
After talking with this couple, their desire is for one of them to take a benefit and for the other one to maximize their position by collecting Delayed Retirement Credits. They are not sure how long they want to do this, but will supplement their income with part-time jobs until they desire to both draw. Susie is starting to have some medical issues, so they want to explore all options.
PRIMARY – this is the best option they have, but does not take into consideration their desires and is used for comparison purposes. Their lifetime cumulative benefit would be $1,076,033.00. John would wait and draw his benefit at age 70 and Susie would file a Restricted Application at age 68 years and 1 month and then switch to her own benefit at age 70. Survivor Benefit will be $2895.00
FULL RETIREMENT AGE – both would simply draw their benefits at age 66 – cumulative lifetime benefit would be $968,408.00. Survivor benefit will be $2,193.00.
DELAYED – both would wait at draw at age 70 – cumulative lifetime benefit would be $1,050,814.00. Survivor benefit will be $2895.00.
***Many people think waiting to age 70 is the best option – not so – as you see in these totals, not using a claiming strategy costs them $25,000 and income stream for 2 years****
ALTERNATIVE 2 – Susie files at age 64.1 on her own record; John files a Restricted Application at age 66 and then switches to his own at age 70 – cumulative lifetime benefit – $1,072,628.60. Survivor benefit will be $2895.00.
ALTERNATIVE 3 – John files a Restricted Application at age 66; takes his own benefit at age 68; Susie files for her own benefit at age 66, cumulative lifetime benefit is $1,016,993.00. Survivor benefit is $2544.00.
ALTERNATIVE 4 – John files a Restricted Application at age 66, takes his own benefit at 70; Susie files at age 66, cumulative lifetime benefit is $1,065,153.00. Survivor benefit is $2895.00.
Our job as Advisors is to keep the income stream where people are comfortable, and to keep the Survivor Benefit as high as possible. Most people do not realize that with some flexibility and knowledge of the rules and regulations, you can continue with income; improve your benefit and your survivor benefit until you decide to draw. In this real life case, from simply drawing at age 66 to utilizing claiming strategies, the lifetime benefit improved over $100,000 depending on the option the client chooses, and the survivor benefit improved over $700 per month. Most online calculators will give you Primary, Full and Delayed….we give you the Alternatives.
Hence, “Shame on You” was written. There are professionals like Pillars that are anxious to help you with your Social Security benefit. Make the right choices…..they are permanent.
Contact us at 601-954-0699 or firstname.lastname@example.org or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a retired CPA – we have your back on this one!