As a Social Security Advisor, you get tired of the word DEPENDS – that is because there are so many rules for this benefit that most of the time IT DEPENDS. We thought the best way to dig into some of these rules was to give you a handful of the more common ones; hopefully this will get your wheels turning for further advice or questions.
1. If you don’t ask for a benefit, you might not receive it.
Social Security does not know if you are married, have children, have been divorced or widowed. Their job is to give you information about your benefit and your benefit only. Also, if your marital situation changes, or a former or current spouse dies, this can affect your benefit and the amount you are eligible to draw.
2. Your Social Security statement reports you are eligible for one benefit at different ages. Can I be eligible for more than one benefit?
How do you know if you are eligible for more than one benefit? You need to know the rules and regulations. If eligible for more than one, which one do you take first. IT DEPENDS. With proper timing, strategizing in this area can greatly improve your income stream through life expectancy.
3. There may be no advantage to waiting until your Full Retirement Age to collect a divorced widow(er) or widow(er) benefits.
There is a different calculation called RIB-LIM that is used to calculate the above benefits. This formula creates no increase in this benefit past a certain point that comes before your Full Retirement Age benefit, up to 51 months before FRA.
4. What if I realize I have made a mistake in filing early?
There is a one-year window, from the date of your first benefit, called a DO-OVER period; during this time frame you can change your mind about how you have filed. The caveat with this window is that all benefits, including any auxiliary benefits attached to your benefit have to be repaid. You need to know what you are doing before you make a final decision.
5. Earnings Limitations reductions impact all beneficiaries from worker’s benefit.
If your spouse or your children are drawing a benefit from your benefit, and you trigger the Earnings Limitations reduction rule with your excess income over the limit, a reduction will be appointed on a pro rata basis to all those family members. This can be a HUGE hurt that usually is unrealized until it is too late. Before you draw early and continue working, have a professional review of your situation.
Pillars LLC is in the Corinth, MS area but service all 50 states. Roy and Diane are both National Social Security Advisors and Roy is a former CPA of over 40 years. You may contact them at dthompson@pillarsllc.com, on their website at www.pillarsllc.com or call at 601-954-0699. KNOW before you GO!!
