Social Security for many people is their only source of retirement income and for most it represents one of their larger retirement assets. The rules have changed! In November, a law was passed that removes two popular social security claiming strategies. The changing rules, and how you apply for benefits, can make the difference between hundreds of thousands of dollars in your social security benefits. What are you doing to maximize your Social Security benefits?
The file-and-suspend claiming strategy, which has been so helpful in many retirees’ cases, is gone if not used by next April and you are 66 then. As of next May, you will no longer be able to file and suspend a benefit. If you suspend benefits, then all benefits taken on your Social Security benefits, including for your kids or spouse, will stop.
Social Security widow benefits have not changed. You may continue to take widow benefits and then claim your own later, if this is advantageous for you.
If you’re younger than 62 at the end of 2015, or are already taking benefits, then you probably have nothing to get nervous about. This is based on two interpretations of reading the new law. However, the government has not made a final clarification regarding the rules they just passed a few weeks ago.
If you’re turning age 62 you should sit down with a financial professional to review your options and to clarify them based on your family’s financial and cash flow needs.
In summary, there are three groups of people and they are all impacted differently with the new law:
- If you are already retired and receiving benefits, you will not be affected by the change.
- If you can file for social security benefits prior to May 2016, it is critical to understand your options, what you may be losing in the future, and how to maximize your potential.
- If you cannot file for social security benefits until after May 2016 there is no action needed at this time. You will deal with issues down the road.
Do you know what you don’t know?
So, if you’re between the ages of 62 and 70 and have been procrastinating about learning how to maximize your retirement, it is probably prudent for you to sit down with a financial professional and look at how the new laws maybe affecting you.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.