I am sitting at my desk just shaking my head. I have just read five articles from highly acclaimed financial spokespersons or firms and each of them contained wrong information about Social Security claiming strategies or benefits. Not little errors either – errors, that if followed, would have cost the retiree a lot of money over their lifetime. On a daily basis, we receive news links from all over the nation, and it is so discouraging to realize that John Q Public is reading this as well, and thinking it is factual.
Some of these errors include:
- Full Retirement age is 65 – so very wrong!! It is 66-67 depending on your date of birth. This error can be costly in so many areas of filing. Age 65 is when you file for Medicare.
- For a married couple, the higher earner should file first. WOW – this again can be so WRONG in many cases. It is a numbers game that needs to be analyzed to determine this decision. Remember, every Social Security scenario is different – there is no ONE SIZE fits all to any of these questions.
- At age 70 your benefit will automatically switch to your benefit if higher. Again, WRONG. You must fill out another application and many clients thinking this is automatic have missed out on months of higher earnings.
- File early and take the money and invest it. Sounds like a good plan, but, how many people will do this? Also, what about the Earnings Limitations if still working, what about reducing your Survivor Benefit? Bad advice in most cases. Also, remember that your Social Security benefit grows by 8% each year you wait to file after Full Retirement Age.
- Widows should draw their Survivor Benefit as soon as possible to maximize their income potential. Again, in most cases this is bad advice. Widows have many different options and the Bi-Partisan Budget Act of 2015 did not impede their multiple options. Please, please, this is an area where we see so many mistakes. Widows can draw their benefit first, they can take their Survivor benefit, they can leave them all alone to grow in value – just because a benefit is available does not mean it is in your best interest to draw it.
- Waiting until age 70 is always the best option. Again, this is not true. If married and you are both age 62 prior to January 2, 2016, waiting until age 70 will lose you money. To give you a short summary, this is because you are eliminating claiming strategies that will provide one of you with income between ages 66-70 and allow the other party to let their benefit to grow at 8% per year.
Remember readers, there are 2,728 rules and regulations involved in Social Security law and most of the laws have exceptions to the rule. Professional review and advice will clear the way for a better retirement income stream and give you the peace of mind that you have made the best decision available based on the law.
Call Pillars LLC at 601-954-0699 and Roy and Diane will help you with these decisions and show you how to maximize your benefit and accomplish your personal goals. They are both National Social Security Advisors and Roy is a former CPA of 40+ years. They are in Corinth but service all 50 states. www.pillarsllc.com