6/18/2012 2:43 PM ET|
7 Social Security sins
You want to maximize your benefits, of course, but how do you do that? First, you avoid -- if you can -- some costly missteps.
Since the first payment was made in January 1937, Social Security has provided a safety net and source of reliable income for retired workers, their spouses and dependents. But getting the most from your Social Security benefits is far from simple.
While you can begin collecting Social Security as young as age 62, your benefits will be smaller than if you had waited to full retirement age (66) or later. But while waiting longer can mean more money monthly, it may result in less money overall if you die early, so selecting the right age to file is a critical component to maximizing your benefits.
Kevin Worthley, a certified financial planner with the Retirement Co. of New England, says it is important to make the right decision about when to file because there are almost no second chances when it comes to Social Security.
"There used to be a strategy called a do-over where recipients could receive benefits early, then years later withdraw their application, repay the benefits received and then reapply for benefits going forward at a higher payout," Worthley says. "The technique was overly promoted and somewhat abused, so the Social Security Administration curtailed the technique recently by only allowing a do-over if implemented within 12 months of the original receipt of income benefits."
So to get it right the first time, avoid committing these seven Social Security sins.
1. Waiting past age 66 to file
Even if you don't intend to collect benefits until after age 66, don't forget to file by the time you reach full retirement age. If you don't wish to collect at that time, simply indicate that you want to suspend your benefits so they can keep growing.
Failing to file by 66 negates the possibility of earning a full lump-sum repayment if you later decide you'd rather have collected those suspended benefits (such as might occur if you suffer health problems in your late 60s). In that scenario, the lump-sum option will award you all you would have collected to that point at once, but this works only if you filed on time.
In addition, using a "file-and-suspend" strategy can also allow your spouse to begin collecting benefits while you continue working.
2. Waiting past age 70 to collect
There is a financial incentive for seniors to delay collecting Social Security past their full retirement age. For each year they wait, their benefits get a bump of between 5.5% and 8%. However, there are no additional benefits for waiting past age 70. At that point, any further delay in collecting simply means money lost.
3. Neglecting spousal benefits
Social Security offers several options for spousal benefits, so don't miss this opportunity to bring in some extra cash if you or your spouse is eligible. For example, if you are collecting benefits and your spouse is at least 62 and isn't collecting benefits, your spouse is eligible for a separate spousal benefit. The beauty of this arrangement is that it doesn't diminish your benefits in any way.
"In addition, a spouse who has reached full retirement age and whose spouse is already receiving a benefit can claim a spousal benefit while continuing to work and letting his or her own benefits grow for the future," says Worthley.
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Please list the 7 Social Security Sins committed by our government (thieving bastards)
if they would just take the cap off social security and medicare, there would be plenty of money in social security. someone making 10 million should pay at least the same percentage of his earning as the working family making $60,000. this shows congress is controlled by the rich !!!
Collect while u can ! The well is running dry! I just made out my Last Will and Testament !
It reads as follows: Being of Sound Mind and Body, I spent it all before I died ! You'll do ok if you do the same. Get your Bucket List together and start scratching off the items on the List before it is too Late !!!! Have you seen the Grand Canyon yet in the Morning? What the hell are you waiting for ???
Social Security.........The greatest ponzi scheme the world has ever known.
How much has our congress stolen over the decades?
Now that we're nearly 16 TRILLION in debt... they'll never be able to pay it back.
Just give me back the money that was stolen from my paychecks, it don't want the interest just the principle amount.
Pisses me off that I loose money from my paycheck to support a bunch of deadbeats or illegals who're scamming the system.
This article if full 0f errors, and half truths by the author. The comments as well show how blatantly ignorant most folks are about Social Security law. Try reading the Social Security Handbook. The comment about working under the table, after retirement, is illegal, of course, and I hope you get caught. Politicians are some of the worst when it comes to knowlege about Social Security law. Social Security can be fixed to be there for future generations. ask the people who work for Social Security, they can tell you how. Eliminate outdated, no longer needed benefits, and raise taxes, and double the staff in the fraud department to chase down the crooks and prosecute them.
by former employee
The Social Security pamphlet of 1936 read, "Beginning November 24, 1936, the United States Government will set up a Social Security account for you. ... The checks will come to you as a right." (http://www.ssa.gov/history/ssb36.html). Americans were led to believe that Social Security was like a retirement account and that money placed in it was, in fact, their property. Shortly after the Social Security Act’s passage, it was challenged in the U.S. Supreme Court, in Helvering v. Davis (1937). The court held that Social Security was not an insurance program, saying, "The proceeds of both employee and employer taxes are to be paid into the Treasury like any other internal revenue generally, and are not earmarked in any way." In a 1960 case, Flemming v. Nestor, the Supreme Court said, "To engraft upon Social Security system a concept of ‘accrued property rights’ would deprive it of the flexibility and boldness in adjustment to ever-changing conditions which it demands." ~ Walter Williams.
The lies have not been a secret, we've been trying to tell you people for years... Do. Not. Trust. The. Federal. Government.
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