What Do You Really Know About Social Security Laws?

Posted on by hgasaway Leave a comment

Roy and I have found with talking to people each day, even the most basic knowledge about Social Security is not understood. With all the articles on the internet, some good and some bad, people are just confused and basically give up educating themselves. They drive to the Social Security office and just take what they are given. This does not have to be the case. Remember, the Social Security office will give you information on your benefit only…..not advice on how to file collectively and improve your income position.

In this article, we are going to define some of the more elementary terms related to Social Security:

  1. Cumulative Benefits – lifetime payout of Social Security benefits.
  2. Delayed Retirement Credits – 8% increase in your benefit amount per year, for every year you wait to file after your Full Retirement Age. This is actually calculated monthly, so you do not have to wait an entire year.
  3. Delayed Strategy – claiming benefits after Full Retirement Age (FRA) in order to receive increased benefits.
  4. Divorced Benefits – benefits paid to the divorced spouse of an eligible worker to whom you were married at least 10 years – must comply with the new law changes effective November 2, 2015.
  5. Earnings Record – the history of your earnings for the years you have worked during your lifetime.
  6. Earnings Test – the reduction in benefit taken if you continue to work while receiving benefits before you reach Full Retirement Age (FRA). Once you reach FRA, the earnings test no longer applies, and there is no limit on your income. The year your turn FRA, the Earnings Limitations amount is substantially higher.
  7. Primary Insurance Amount – (PIA) is the benefit you will receive at your FRA.
  8. Windfall Elimination Provision (WEP) – a provision that may reduce Social Security benefits based on your earnings history if you are eligible to receive a pension from work not covered by Social Security taxes.
  9. Survivor Benefits – benefits paid to the surviving spouse of a deceased eligible worker.
  10. File and Suspend – a Social Security policy allowing a worker to file an application for retirement benefits but immediately suspend payments. This makes the worker’s spouse eligible to file for and receive spousal benefits. This also allows the worker’s benefit to accrue delayed retirement credits. However, the Bi-Partisan Budget Act of 2015 has altered this policy. Effective April 30, 2016, File and Suspend will no longer exist.

This is truly only a fraction of the many rules and regulations (2,827) that encompass the Social Security law. And, all of these laws carry exceptions to the rules. Most people that take their taxes to be done by an accountant or CPA have a better end result…..because these professionals are versed in the law and know the exceptions to the rules. This is also true of your Social Security Benefit. This is a benefit that will be with you the rest of your life, so have it professionally reviewed for the best end result.

Please visit our website at www.pillarsllc.com or email us with any questions at dthompson@pillarsllc.com. You may also call Pillars (Roy and Diane Thompson) at 601-954-0699 with any questions you may have. We enjoy what we do and love to help people better their Social Security benefit.

Social Security Knowledge Center: People Thought We Were Joking

Posted on by Diane Thompson Leave a comment

Roy and I have been educating our communities for over two years now, and many people thought we were joking…..this all sounds too good to be true. Well, with the passage of the Bi-Partisan Budget Act of 2015 people are waking up to realize this is not a joke, and that these opportunities are going to go away.

The reason behind these changes was to close a loophole that provided people more income on their Social Security benefits. Congress did allow these changes to be slowly phased out (next 4 years if you qualify). But, the most important deadline is for those turning age 66 by April 30, 2016 (Tier 1). The option to File and Suspend will no longer exist.   If you don’t File and Suspend by April 20, 2016, if you qualify, you will only be allowed to Suspend, which closes the door on many great benefits. This provided you the option of filing for your benefit, immediately suspending it, allowing it to grow at 8% per year until you decide to take your benefits, and also allowing your spouse to collect Spousal Benefits off your benefit amount. This is called the Restricted Application and there are also rules and regulations regarding this option.

The second category is for those that turned age 62 by December 31, 2015. You will still be able to file a Restricted Application for Spousal Benefits if you meet all the qualifications. This is a very beneficial tool for capitalizing your benefits. One party must file for their benefit, but the other party can still file a Restricted Application and allow their benefit to accumulate Delayed Retirement Credits worth 8% per year.

This information is not available at the Social Security offices. By law, they can give you information on your individual benefit, but not on claiming strategies, combination strategies or other options. It is a shame they can’t give you this information, but on the other hand, don’t blame them for something they are not allowed to do. Blame yourself, for not realizing that these opportunities are available to you, and there are professionals that can help you get the maximum benefit available to you.

We are very blessed with so many seminar requests in the upcoming months. Some are private and some are public….call us at 601-954-0699 to reserve your seat. Or if you just want an individual consultation, we can assist with that.

Those that are Tier 2 (turned age 62 by December 31, 2015) need to consider reviewing what options they will have. It makes sense to PLAN out this decision, because the best end result will come with the proper timing of your benefit, understanding the rules and regulations that apply to your situation, and combining your lifetime Social Security benefit with other assets for your best draw down options. Your lifetime benefit will not fluctuate drastically in 4 years….if you continue working it will only get larger, so it is never too early to PLAN and ANALYZE.

Next public seminar is February 2, 2016 at the Brandon Library, 6:00 p.m. Reservations required. Then we are headed to Florida on February 24th and 25th for seminars in the Bradenton/Sarasota area.