Are You Fully Informed on Social Security?

For most U.S. citizens, at least a portion of your retirement income will consist of Social Security retirement benefits. Electing these benefits offers a significant planning opportunity because the choices you make will impact your lifetime retirement income capacity.

You can begin Social Security retirement benefits as early as age 62 or as late as age 70. Benefits will be reduced if started prior to full retirement age and will be higher if delayed past full retirement age.

Full retirement age is the point at which you are entitled to unreduced retirement benefits. That age ranges between 65 and 67 depending on your birth year.

Widows or widowers can begin Social Security retirement benefits as early as age 60.

Social Security retirement benefits are permanently reduced by a fraction of a percent for each month prior to full retirement age that you start collecting benefits.

Delayed retirement credits are granted for each month past full retirement age that you delay receiving benefits. This benefit increase ceases at age 70. For those born in 1943 or later, the yearly rate of increase is 8%.

You can be eligible to receive benefits based on your own earnings record or that of your spouse. Even if you’re divorced, you can potentially be eligible for benefits based on your ex-spouse’s record depending on the length of your marriage and if you’ve remarried since then.

Even if you have never worked under Social Security, you may be able to get spousal retirement benefits if you are at least 62 years of age and your spouse is currently receiving benefits.

If you turned age 62 by January 1, 2016, you are still allowed to file a restricted application. This allows you to restrict your application to only receive a spousal benefit rather than the benefit based on your own earnings record. Otherwise, you are automatically given the higher of the two benefits.

Everyone has the option to suspend their benefits after beginning them, but the loophole of using this feature in conjunction with a restricted application to receive spousal benefits until your own benefit is maximized at age 70 closed effective May 1, 2016. Anyone who had implemented this strategy prior to the deadline will still be able to continue as planned.

A portion of your Social Security retirement benefit can be withheld if your income is above certain annual limits. Benefits are no longer reduced once you reach full retirement age.

Upon death of the first spouse, the survivor will receive 100% of their deceased spouse’s benefit if that amount is higher than their own. If that amount is not higher, the deceased’s benefit will simply stop.

Depending on your income level and tax filing status, up to 85% of your Social Security benefit can be taxable.

If you change your mind within 12 months of applying for benefits, you can withdraw your application and repay all benefit received. You are limited to one withdrawal per lifetime. If you are at least full retirement age but not yet 70, you can request to temporarily suspend benefit payments, which does not require payback of benefits received to date.


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