According to the Emloyee Benefit Research Institute, only two-thirds of Americans have saved for retirement, and the majority of them have saved less than $25,000. Many American's are depending on Social Security to fund their retirement costs because of either bad planning, large losses to employer 401K plans, IRA's, and other savings plans. Still worse, some have simply not established a savings plan, at all.
Regardless of anyone's retirement savings situation, when it comes time to enter the arena of Social Security income benefits, as with many things in life, knowledge is power. And in the case of
Social Security, knowing your options can make the difference of literally, tens of thousands of dollars over the course of your retirement years. It is essential that you spend time with a
professional consultant to help you map out a educated path of when and how you and/or your spouse should approach Social Security benefits.
Choosing the age to apply for Social Security benefits will affect the amount you’ll receive. And if you’re married, things can become more complicated. For example, should you claim benefits based on your own earnings history, or should you claim spousal benefits based on your spouses earnings? Also, if you are a surviving spouse, you may qualify for widow or widower’s benefits based on what your spouse was receiving. There are different strategies that may be very beneficial, based on your current and past maritial circumstance, your current income sources, and your future income sources.
Sometimes it's best to simply file for your own benefit. If this is the correct choice for you, the question is, at what age should you start taking your benefits? Many factors can affect this decision. For instance, how healthy are you today? What is your family history, and are you genetically disposed to certain health problems? What is your income and current cash flow, and will this change in the next few years?
Spirit Financial Concepts has an extensive system of calculating all the factors involed in determining what your personal best options are. We do so by utilizing a remarkable program called, "SSI Max" that will outline what steps you need to take in order to maximize your Social Security benefits. But, it will also illustrate the shortfalls of a wrong decision, and what solutions may be suitable for you.
A strategy that many married couples will find valuable, is what the Social Security Adminstration refers to as "File and Suspend". This strategy can greatly increase many couple's benefits, by taking advantage of spousal benefits, and "Delayed Retirement Credits" simultaneously. By taking this strategy of drawing a spousal benefit rather than your own benefit, it allows your own benefits to grow 8% for each year between Full Retirement Age, and age 70. While there is no "One-Size-Fits-All" strategy, this is a very effective strategy for many couples.
Another very effective strategy is the "File & Restrict" method. If married, or eligible for a benefit on an ex-spouse’s record, once you reach Full Retirement Age (FRA), you can use a restricted application to claim a spousal benefit, while letting your own benefit continue to grow. You would then switch to your own higher benefit amount when you reached age 70.
Many Widow's, or Widowers, receive a monthly benefit based on the work records of a deceased spouse. If a Widow/Widower has reached Full Retirement Age, they can receive 100% of their deceased spouse. This benefit can be taken as early as age 60, or age 50 for a disabled spouse. Based on many other factors, this may be your best option.
Spirit Financial Concepts is a member of the National Association of Health Underwriters.