Social Security is designed to be a guaranteed, lifetime income source that you have been contributing to your entire working life.
Most people are unaware of how Social Security retirement benefits work and what options they have for redeeming their benefits.
Part of the reason for this is there are many rules involved in collecting benefits, including those for spousal and survivor benefits for married and divorced individuals.
At Gedeon Law & CPA, we help our clients collect additional social security income by properly navigating the rules for individual and supplementary benefits.
How important is it to create social security collection strategies which optimize lifetime benefits?
Consider the additional social security income you can realize by taking advantage of a social security tax loophole that allows a lower income spouse to start collecting reduced social security benefits at age 62 and unreduced spousal benefits at full retirement age (FRA) 66 while the higher income spouse waits until age 70 to start collecting benefits.
In this case, assume the higher income husband lives through age 75 and the lower income wife lives through age 82, the following chart highlights the additional social security income that can be received by applying the right collection strategy:
Both Collect At
|Age 62||FRA||Age 70||Hybrid Approach|
|Wife’s Individual Benefits||$75,600||$72,000||$57,024||$75,600|
|Wife’s Spousal Benefits||$58,800||$60,000||$22,176||$60,000|
|Husband’s Individual Benefits||$277,200||$264,000||$209,088||$209,088|
|Wife’s Survivor Benefits||$152,460||$184,800||$243,936||$243,936|
|Total Benefits Received||$564,060||$580,800||$532,224||$588,624|
As part of the new tax legislation recently passed, Social Security benefits will be increasing 1.7% in 2013.
The earnings limits also increase under the new law. Individuals who turn 66 this year do not lose any benefits if they make $40,080 or less a year before they reach that age. Individuals who are at least 62 but are not 66 by the end of 2013 can make up to $15,120 before they lose any benefits. There is no earnings cap once a beneficiary turns 66.
At Gedeon Law & CPA, we are available to assist clients with assessing their options to determine the best collection strategy. Making an informed decision on Social Security can create a solid foundation for your retirement plans and increase your retirement income.
Please contact our office today to schedule an appointment to discuss your Social Security collection options.