Maximize Social Security Benefits
To maximize social security benefits must be the number one goal of every senior. Failure to do so costs seniors $10.1 billion in unclaimed Social Security benefits annually according to the AARP. This happens because senior couples are not aware how to fully maximize their spousal benefits. In many cases, couples pass up spousal benefits because they are not aware they are entitled to them and fail to maximize social security benefits.
Are some of your benefits included in this $10.1billion?
Let me tell you how Linda and I maximize Social Security benefits. and how we almost missed receiving our spousal benefits.
Read this all the way through since you may be making the same mistake we almost made!
We both planned to wait until our respective full retirement ages (FRA) of 66 to start drawing Social Security benefits. Then by a stroke of luck, I read Spend 'til the End , a financial planning book, that showed that Linda was leaving over $20,300 in benefits unclaimed by waiting for full retirement.
Let me give you a little background. I have worked in an executive job most of my life so I will draw the maximum social security benefit ($2,096) at my full retirement age of 66. Early in her career, Linda worked in jobs that withheld Social Security, she worked as a stay at home mom for many years when our children were young, and later, she worked as a teacher in a public school system that did not withhold Social Security. She has the 40 quarters in the Social Security system that makes her eligible.
She receives a small pension from the Texas Teacher Retirement System for her teacher employment. Her Social Security benefit is fairly small, because she did not earn much under Social Security and her SS benefit is reduced because of her teacher's pension.
This means that she can draw her own SS benefit of $424 per month at age 62 and when she reaches FRA at 66, she can draw benefits from my account as my spouse. The standard Social Security spousal benefit is one-half of the other spouse's benefit. Her spousal benefit on my account will be approximately $1,048 per month. This is a way to maximize Social Security.
Spend 'til The End
I was so impressed with the wisdom in Spend 'til The End, I created a website about it. - JH
Without Spend 'til the End , we would have waited until she turned 66 to start drawing her benefits. That would leave 48 months of Social Security payments unclaimed ($424 X 48 months = $20,352). And when she starts taking the spousal benefit on my account, it will be much higher than her individual benefit had she waited until age 66 to start drawing her own benefit. Maximize social security - get every thing you have coming.
Since I anticipate living to over 90 (both my parents died at age 89), I plan to maximize social security and wait until 70 to start drawing my benefit. (I have to live to 81 to break even versus starting my benefits at 66).
It was Linda's turn to do me a favor on Social Security. She read in an AARP publication that I could draw on her spousal benefit since she had started drawing on her own benefit. I had not really thought about it. I contacted the Social Security Administration and the representative verified this was the case and set up the benefit for me. Again, maximize Social Security.
Each month I receive a direct deposit for $178 per month after my Medicare payment is automatically deducted. It is not much, but it pays my Medicare premium and leaves me a little extra money. When I reach 70, I will discontinue her spousal benefit and switch to my own higher benefit.
If I had not known to draw as a spouse on Linda's account, I would have missed 48 months of spousal benefit. This benefit, including payment of my Medicare premium, amounts to $13,200 for the four years. NOT BAD!
LESSON LEARNED - Check with your Social Security representative to see if you are taking full advantage of ALL your possible benefits.
SS will not notify you that you are missing out on your full benefits!
Now, let's look at other situations where seniors might not be aware they are passing up Social Security benefits.
Two Income Couples
We covered some of the options to maximize Social Security in our personal example above, but you can find additional information at Benefits for your Spouse
One Income Couples
Did you know that your spouse can draw a spousal benefit even if she/he never put a dime into Social Security?
When your spouse reaches 62, she/he can begin drawing spousal benefits on your account. However, if the benefit begins early, the amount will be permanently reduced by a percentage based on the number of months up to her/his full retirement age.
Your spouse can also qualify on your record for Medicare at age 65.
See additional information about spousal benefits at Benefits for your Spouse.
Divorced Singles
Note: The following is taken from the Social Security Handbook
You are entitled to a divorced spouse's insurance benefits on the worker's Social Security record if:
- The worker is entitled to retirement or disability insurance benefits;
- You have filed an application for divorced spouse's benefits;
- You are not entitled to a retirement or disability insurance benefit based on a primary insurance amount which equals or exceeds one-half the worker's primary insurance amount;
- You are age 62 or over;
- You are not married; and
- You were married to the worker for at least 10 years before the date the divorce became final.
Note: You are not entitled before age 62 even if you have an entitled child in care.
The divorced spouse of a worker who is not entitled to retirement or disability insurance benefits, but has reached age 62 and is fully insured, can become independently entitled to benefits on the worker's earnings record. To do so, however, the divorced spouse must meet the requirements in (B)-(F) above and have been divorced from the worker for not less than two continuous years.
My advice: Contact the SSA and get help on this situation. Ask for a supervisor if your representative is not familiar with your situation.
Benefits for your Children (or dependent grandchildren)
When you qualify for Social Security retirement benefits, your children may also qualify to receive benefits on your record. Your eligible child can be your biological child, adopted child or stepchild. A dependent grandchild may also qualify.
It seems that more and more seniors are raising their grandchildren so make certain that you are not passing up benefits that you should receive for your child or grandchild.
For information on this subject go to the SSA page about Benefits for your Children.
My advice: Contact the SSA and get help on this situation. Ask for a supervisor if your representative is not familiar with your situation.
Upgrade Your Social Security Benefits
There is a way to upgrade your Social Security benefits. This will allow you to receive benefits at 62 and then upgrade them to the full retirement age or at age 70.
You can use this technique if you start receiving your benefits early before your full retirement age and realize later that it would have been better to have waited so your benefit payments would have been larger.
To upgrade Social Security benefits, you file a Form 521 (Application to Withdraw) to request that your previous application for Social Security benefits be withdrawn. You have to pay Uncle Sam back the benefits you were previously paid, but you pay it back with inflated current dollars with no interest. You then reapply when you reach the next age for increased benefits (full retirement age or 70 years).
This takes a large amount of money, but depending on several factors, this move makes a lot of sense to maximize Social Security benefits. Especially if you expect to live to a ripe old age to take advantage of the higher benefit payment. This is equivalent to purchasing an annual inflation-indexed annuity equal to the difference between the benefits received at age 62 and the benefits received at full retirement age or at age 70, whichever age you reapply. This will let you maximize Social Security. Read information about this subject directly from the Social Security website.
Well, that wraps up our information about possible Social Security benefits that you might be missing. We hope that you might have uncovered a new source of income to help you with your retirement or shown you a strategy to use to maximize Social Security benefits.
You can read the AARP article referenced above about $10.1 billion in missed benefits at Boost Your Income.
Tell us how you are using your Social Security Benefits
I have read there are 2,728 rules in the Social Security Handbook so I challenge anyone to know them all. If we share how we are successfully getting our benefits, we seniors can learn from each other.
Have A Great Story About Your Social Security Benefits?
Please help by sharing your situation and the SS benefits you are getting. It is easy. Just type it in and follow the directions at the bottom of the form. We all thank you in advance for your help.
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