Social Security’s website (www.ssa.gov) has made great strides in communicating the overwhelming options when it comes time to choosing your Social Security strategy. Information is located in two places: on its public website and through a private portal accessible by personal login. It’s worth reviewing the website well in advance of age 65 as it will allow you to consider different options prior to making strategy decisions. Below are some tips to help you navigate through the website as you make benefit decisions that are right for you.
- Your Work History
Social Security has your earning history available on the private side of the website; however, you’ll want to review it for accuracy. When logging into the website, it displays your earnings records from when you were first employed. Any changes you make will need to take place prior to filing for benefits. Often there are gaps in employment income where an employer may have sent incorrect earnings information to the Social Security office. Given that Social Security takes into account your top 35 years of earnings to calculate your benefit, you’ll want to verify the accuracy of that information. If it’s incorrect, Social Security may allow you to provide proof of your earnings with past tax returns. You can also request that the Social Security office review its documentation for errors.
Your earnings records can be found when looking at the home page through the private portal and by clicking on the “Earnings Record” tab at the top of the page.
- Benefits at Different Ages
When logging into Social Security’s website, your personal retirement, disability, family, and survivor benefits are outlined. If you have enough credits to qualify for benefits, the retirement section provides an overview of what you would receive at:
- a) your early retirement age (age 62),
b) your full retirement age (between ages 66-67), and
c) age 70
This information is displayed on the “Estimated Benefits” tab located on the home page.
The public site also offers calculators to assist in planning your future. These calculators include a Retirement Estimator (estimates monthly benefits), Life Expectancy Calculator, Quick Benefits Calculator (displayed in today’s and future dollars), and Full Retirement Age Calculator.
- Rules for a Variety of Situations
On the public site, you can find detailed information on a specific situation by choosing “Benefits” on the top bar. Here you can learn detailed information about the kind of benefits offered. These include benefits based on a spouse’s or former spouse’s work record, survivor benefits for widows and widowers, benefits for children with parents who are disabled, retired, or deceased, coordination with disability benefits, and same sex-marriages.
- Social Security‘s Not So Well Known Good Benefits
Most people file for Social Security benefits without looking into what is available. There are so many hidden benefits that are outlined in Laurence Kotlikoff’s book, “Get What’s Yours: The Secrets to Maxing Out Your Social Security.” The book includes the chapter, “50 Good News Secrets to Higher Lifetime Benefits.” Here are two of those 50 good secrets that might apply to you, which you could lose if you leap into Social Security without looking first.
- Most people know that spouses married for ten years or more can apply for “spousal benefits” equal to one half the amount their spouse receives, without affecting their spouse’s benefits. But you might not know that if your spouse has filed for retirement benefits and you’ve reached full retirement age at 66 (for those born between the years 1943 — 1959) and age 67 (for those born after 1960), you can file for “spousal benefits” and collect them until age 70 and then switch to your own retirement benefit amount.
- Some people start receiving Social Security after full retirement age and because of income from work or reduced expenses, realize they could have waited and had their benefit amount increase 8 percent per year. They might not know that after full retirement age, they can ask Social Security to stop payments and then restart any time up to age 70 at the higher rate.
- Social Security’s Not So Well Known Traps for the Unwary
Even though the Social Security Administration has many resources available to help you make the right choices, they do not provide guidance on everything. This can lead people to make costly decisions. The Social Security Administration does not help you develop a strategy for taking your benefits so you receive the maximum dollar amount (there is third party software available for this). Kotlikoff’s book has “25 Bad News Gotchas” that can reduce Social Security benefits significantly and forever. For example, when filing for spousal benefits before full retirement age, Social Security considers you to be applying for both spousal and your own retirement benefits. You will receive the larger of the two benefits, and this cannot be changed – even after full retirement age. This will cause you to lose the option to switch to your own retirement benefits after full retirement age, which may at that time be higher than the spousal benefit.
August 14, 2015 was the 80th anniversary of Social Security. It is one of America’s great social programs and a key part of retirement income for all but the super wealthy. It will serve you best if you take time to look into the details of your many choices carefully before you make decisions that will affect you for all your retirement years. Prior to making important financial decisions, visit socialsecurity.gov or a Social Security office and consider consulting a trusted financial professional during or near retirement.
Samuel Financial LLC is located at 858 Washington Street, Suite 202, Dedham, MA 02026 and can be reached at (781)461-6886. Securities and advisory services offered through Commonwealth Financial Network, member FINRA/SIPC, a registered investment adviser. www.samuelfinancial.com