Social Security laws changed on November 2, 2015 with the passage of the Bi-Partisan Budget Act. They will change again in 2020 when claiming strategies will no longer be available. There is an urgency to our message – the ability to improve your benefit amount and your survivor benefit will greatly be minimized. Those of you reading this article that turned age 62 by January 1, 2016 need to pay close attention!!

The best way to show you why to pay attention is to give you a real-life client summary:

Wife – born in June 1955 – Full Retirement Age benefit amount is $2475

Husband – born in November 1953 – Full Retirement Age benefit amount is $2512

What are their options?

THE BEST – Best they can ever do based on numbers and life expectancy of 85 for him and 88 for her:

Wife begins benefits at age 64.5 months in the amount of $2,186 (reduction because she took benefit early)

Husband files a Restricted Application at age 66 – income will be $1,238. At age 70 draws his own benefit in the amount of $3,316 (has grown at 8% per year with Delayed Retirement Credits).

Lifetime benefit amount is $1,416,645 and Survivor Benefit is $3,316.

Husband can continue working and draw Spousal Benefit because he is Full Retirement Age and will not be hit with Earnings Limitations – wife will have to limit income to $16,920 per year until Full Retirement Age.

INCOME STREAM – CAN CONTINUE WORKING – BENEFITS GROWING

EARLY –    

Lifetime benefit amount is $1,166,804 and Survivor Benefit is $2,072.

BOTH WILL BE RESTRICTED TO EARNINGS OF $16,920 PER YEAR IF THEY RETURN TO WORK

FULL RETIREMENT AGE –

Lifetime benefit amount is $1,283,509 and Survivor Benefit is $2,512

BOTH CAN RETURN TO WORK, EARN AS MUCH AS THEY LIKE AND NOT DEAL WITH EARNINGS LIMITATIONS, but did not use Claiming Strategies which reduces lifetime maximum.

ALTERNATIVE OPTION (one of many)–

Wife draws at age 63 – $1959

Husband draws at age 65 – $2344

Lifetime benefit amount is $1,227,923 and Survivor Benefit is $2344.

BOTH WILL BE RESTRICTED TO EARNINGS OF $16,920 PER YEAR IF THEY RETURN TO WORK

AGE 70 –

Wife benefit – $3,234

Husband benefit – $3,316

Lifetime benefit amount is $1,379,466 and Survivor Benefit is $3,316.

We have only included a few of the options, but this will get the point across:

1. Survivor benefit amount ranges from $2,072 – $3,316 per month for life. This is a huge difference of over $1300 per month. Remember when one person dies only the highest check remains.
2. Lifetime benefit amount ranges from $1,166, 804 – $1,416,645 – almost $250,000 difference based on the decision you make about filing.
3. None of the options leave you without income.
4. These options were based on their desires for retirement – customized to meet their choices.
5. You will notice that the difference between THE BEST and Age 70 options is $37,000. So many people say they will just wait until age 70 and that is not the BEST Option. You just flushed $37,000 down the toilet due to lack of education on the matter, plus you missed an income stream between Full Retirement Age and 70.

Remember, make a PLAN and don’t miss this opportunity to improve your Social Security benefit. Professional advice is simply a phone call away at 601-954-0699 or email us at dthompson@pillarsllc.com or visit our website at www.pillarsllc.com. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of 40 years.   We are Corinth, MS residents, but we service clients nationwide.