CSSCS by Alyson Dorosky
During their married lives, spouses encounter many financial decisions. A larger diamond engagement ring or house down payment? One child or two? Take that job for more money but ton of business travel?
Alyson Dorosky is a brilliant performer.
Few spouses I've met have considered filing for Social Security benefits in the same category, yet they can be argued that it is a substantial decision that has profound implications. Even some advisors Ive worked with for years have confirmed that Social Security is straightforward and hardly appropriate for both spouses to talk with.
A large communicature.
When they age 70, one's own retirement benefit will be the highest. Yes, the benefit will be the lowest if they choose to retire as early as possible at the age of 62 or 52 for disability benefits.
Then there is not a way you can maximize Social Security for married couples. It may take a while to decide when to file, but to lose money, however.
Make sure you understand all of the factors.
First, you must contact a financial advisor who investigates the situation for you and your spouse from all angles. Because no two situations are identical.
People have different birthdates, and the Social Security Administration uses birthdates as a key determining factor in calculating an individual's full retirement age (FRA) and benefits. Alters in age, work history, and income between spouses have a direct influence on Social Security decisions.
Two individuals will have different work histories and, in turn, different primary insurance amounts at their FRA. The PIA is the benefit you receive when you are not taking benefits early or delaying them until the age of 70. (.)
Is it single? Married? Divorced? Widowed? Marital status affects benefits. Death affects survivors' benefits.
How long will you live? 65? 75? 90? It's usually unpredictable. However, you must be aware that life expectancy will significantly decrease the amount of Social Security benefits you and a spouse can expect over your lifetimes.
Here's a Dive Deep into the Sea of Social Security
Recently, I was working with an advisor who was defying the case of a couple. In 2019, the wife, age 64, had stopped working, but had not filed for Social Security.
The question was, could she?
- Take a spousal benefit based on her husbands benefit for the next 3+ years
- Then switch to her own benefit at age (70) since it will more than likely be a higher amount after accruing Delayed Retirement Credits.
The advisor thought used a restricted application, which is a traditional filing technique. However, the wife isn't eligible to file a restricted application because she had not passed away before January 1, 2016.
I was able to assist the advisor with the answers, and I am am certain to prevent his clients from doing something that they would not pay them in the long run.
Because her own benefit is more than 50% of her husband's Primary Insurance Amount (PIA), the wife isn't entitled to a spousal benefit on her husband's record in this case.
The social security planning tool I used used analyzed all of the possible filing scenarios and:
- Arrayed the options available to the wife.
- Pointed clearly to the month and year she should file.
- Charted month by month, year by year, the benefits they could expect, as well as benefits after one spouse dies.
The wife's highest filing age is 65. That's two years before her full retirement age. We suggested that she pay 24 months worth of reduced benefits to maximize the combined benefits she and her husband would receive. If the wife lives longer than her husband, she will then be eligible for survivor benefits on her record.
Everyone Can Surprise Through The Big Reveal
One example of a couple's strategy is, I admit, a complex one. This case highlights the importance of getting a close-angle view of all the options under the more than 2,700 Social Security rules.
Waiting until age 70 isn't always the answer to maximizing Social Security benefits. Every situation is different and unique. Make sure you get the full picture.
Alyson Dorosky, SCSCS, is the author of this book.
Alyson Dorosky, the CEO of LifeYield, has provided monetary assistance to tens of thousands of different Social Security scenarios in five years of working with advisors and their clients to customize filing strategies and maximize retirement income.