Financial professionals spend a lot of time talking to their clients about IRAs, bonds, annuities and investment property, but there’s an extremely important retirement benefit that they often overlook — or don’t discuss at all.
So let’s discuss what sometimes doesn’t get discussed because once you decide to retire you’re going to want as much fixed, guaranteed income as you can get, and Social Security is just as valuable as any of your other assets.
But there’s a lot to consider when it comes to Social Security. For example, you can begin to draw it as early as age 62, but you’ll have reduced benefits for life. You also can put off filing for Social Security as late as age 70 and you’ll get enhanced benefits, also for life.
That sounds simple enough, but be warned: Those contemplating when to take their Social Security benefits shouldn’t automatically take the largest check they are eligible for and assume they are making the right decision.
Let me offer just a few tips and strategies that could help you get the most out of your Social Security benefits:
1. The widow’s benefit. If you are a widowed woman and don’t marry again, you can file for Social Security even earlier than 62. You can do it at the age of 60.
This is known as the widow’s benefit. The rule applies to men as well. If your wife earned more than you, you are entitled to widower’s benefits. When a widow or widower, or a surviving ex-spouse, waits until age 60 or later to remarry, they preserve the right to collect Social Security benefits on their deceased spouse’s earnings record.
2. Divorce and Social Security. A woman who was divorced after being married for at least 10 years is eligible for a portion of her ex-husband’s benefits if she is unmarried at the time she becomes eligible for Social Security. If you are the ex-husband in this scenario, relax. That claim won’t reduce your benefits or those of your new spouse if you married again.
3. Marriage may mean more money. When a spouse dies, the remaining spouse gets the larger of the two Social Security checks. If the surviving spouse gets remarried, he or she is then subject to that same law with the new spouse.
In other words, if a widow gets re-married, and her second husband dies, she is eligible for the benefits of her second husband if he made more money than her.
4. The do-over. If you decide to take your Social Security benefits and then realize you made a mistake, all may not be lost. The Social Security Administration will be willing to wipe the slate clean as if it never happened if you repay the money you received within 12 months.
Follow your own instincts when it comes to when and how to take your Social Security benefits. Just don’t neglect weighing the potential options, because this represents an important part of your overall retirement strategy.
Tony Perrone, author of “I Didn’t Know I Could Do That: 9 Financial Strategies That Can Save or Make You Money” (DropHelp.com), is president and founder of the Estate and Business Planning Group. As a financial professional, his focus is designing income-producing portfolios for retirement. For 16 years, Perrone was host of the popular radio talk show “Now You Know” on FM 96.5 News Talk WDBO in Orlando, which could be heard from Jacksonville to Tampa to Vero Beach.
[The content provided through this article and www.nydailynews.com should be used for informational purposes only and is not intended to be a substitute for professional advice. Always seek the advice of a relevant professional with any questions about any financial decision you are seeking to make.]
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