2016 Year-End Housekeeping for Social Security

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As we wind up 2016, there are several items you might want to look at with regard to Social Security:

  1. Check for errors in your Social Security statements – in 2016 the SSA processed 92,000 complaints about mistakes found in Social Security statements. Officially, you have to correct errors within 3 years, 3 months and 15 days following the year of the mistake. You will need to prove what you have earned to have the SSA correct your record; a W-2, a tax return or pay stubs will suffice as evidence.
  2. Don’t get caught off guard by not knowing your Full Retirement Age. This will affect how much of your benefit you will receive, based on how early you will retire.
  3. When you take your Social Security benefit has repercussions for your spouse as well, not only while you are still living, but their Survivor benefits as well.   Your situation should be reviewed collectively, not individually. This is our expertise.
  4. People who were born after January 1, 1954, will be “deemed” to apply for all available benefits when they file for Social Security and will be paid the higher of the two amounts. But, “deemed filing” does not apply to Survivor Benefits. This is a HUGE missed opportunity if not filed for at the right time. TIMING is critical in all Social Security decisions.
  5. Social Security benefits for divorced spouses remains a fertile area where strategic claiming strategies can make a big difference in retirement income planning.
  6. The Earnings Limitations will increase in 2017 to $16,920 and the year you reach Full Retirement Age will increase to $44,880. Now, if you don’t understand this, you need to get some advice. If you think you can double-dip with Social Security, think again, unless you are earning under these amounts.
  7. Obviously not every situation is ideal. If you can’t find work for an extended period of time, or you are dealing with long-term health issues, then claiming early could be a smart decision. But, an otherwise healthy individual signing up early for Social Security benefits with little to nothing saved could be a regrettable decision.
  8. Half of your Social Security benefits counts toward your combined income, which includes your adjusted gross income plus nontaxable interest. If your combined income reaches a certain threshold – $25,000 for an individual and $32,000 for a married couple filing jointly – you will have to pay income tax on a pro-rated portion up to 85% of your Social Security benefits. Have a professional tax advisor review your overall tax situation.
  9. To get the most from your Social Security benefits, you need a PLAN. You need to start reviewing your situation about two years before making a decision, so the best case scenario can be achieved.
  10. Have a professional review your Social Security situation. These laws are very complicated and just like the tax laws, need professional review and advice. If you don’t know the questions to ask, how can you get the answers you need?

Happy New Year from Pillars LLC

Roy and Diane Thompson are both National Social Security Advisors and Roy is a former CPA of 40 years. Their guidance and direction will make a difference for you and your family. You may contact Pillars LLC on our website at www.pillarsllc.com or email at dthompson@pillarsllc.com or simply give us a call at 601-954-0699. We are located in Corinth, MS but assist clients throughout the United States.