On this episode we discuss how Social Security affects you when you are divorced and what you need to know. For some Social Security may affect people that are divorced. It’s important to understand how it may affect you.
As a Social Security Benefits Planner, we get this question all the time. In fact, it’s probably the most asked question. So it’s important to realize that the decision of when to retire is separate from the decision of when to claim Social Security benefits. For example, depending on circumstances, you might find that it makes sense to retire at a given age, yet hold off on claiming Social Security until a later date — maybe even several years later.
By waiting until age 70 rather than claiming as early as possible at age 62, you can increase your monthly benefit amount by roughly three-quarters. Of course, by waiting, you decrease the number of months in which you’ll be receiving a Social Security check.
So how can you tell if the trade-off is worth it? One way to compare two possible ages for claiming benefits is to compute the age to which you would have to live for one strategy to become superior to the other strategy. Another way to analyze the decision is to compare the payout you get from delaying Social Security to the level of income you can safely get from other retirement income sources.
According to the Social Security Administration, the average total life expectancy for a 62-year-old female is 84.8. For a male, it’s 82. In other words, from a breakeven perspective, most unmarried retirees will be best served by waiting to take their retirement benefit.
This is why it’s always a good idea to have other sources of retirement income. In other words, for each dollar of Social Security you give up now (by delaying benefits), you can expect to receive a greater level of income in the future than you could safely take from a dollar invested in a typical stock/bond portfolio.
A similar analysis can be performed for each year up to age 70, and the conclusion is the same: Delaying Social Security benefits can be an excellent way to increase the amount of income you can safely take from your portfolio.
Of course, there are circumstances in which it would not make sense for an unmarried person to delay taking Social Security.
First and most obviously, if your finances are such that you absolutely need the income right now, then you have little choice in the matter.
Second, if you have reason to think that your life expectancy is well below average, it may be advantageous to claim benefits early. For example, if you have a medical condition such that you don’t expect to make it past age 64, it would obviously not make a great deal of sense to choose to wait until age 70 to claim benefits.
In Summary:
For unmarried retirees, from a breakeven perspective, you’ll be best served by waiting until age 70 to claim benefits if you expect to live past age 80.5. (And, for reference, the average total life expectancy for a 62-year-old female is 84.8. For a male, it’s 82.)
For unmarried retirees, on a dollar-for-dollar basis, the lifetime income you gain from delaying Social Security is generally greater than the level of income you can safely get from other sources. As a result, delaying Social Security can be a great way to increase the amount you can safely spend per year. (Or, said differently, it can be a great way to reduce the likelihood that you will outlive your money.)
The shorter your life expectancy and the greater the available yield on inflation-protected bonds, the less desirable it is to delay claiming Social Security benefits.
Still confused about what is right for you? Get our FREE E-Book on Social Security Basics and start getting your questions answered. Faye Sykes is a National Speaker on Social Security and understands how to maximize your Benefits.
Most people assume that the Social Security Administration is there to give you advise when you are submitting an application for benefits. Not particularly true. Almost 70% of all applicants do NOT have the ability to maximize their benefits when speaking to a Social Security Administration Agent.
One of the largest areas of confusion at the Social Security offices is the filing of restricted applications. A restricted application means the person is not applying for the highest benefits he may be eligible for at the time. For instance, a person could apply for survivor benefits based on a late spouse’s earnings record while he lets his own benefits grow each year until age 70. He would then switch to his own higher benefits at age 70.
Problems arise because the Social Security agents do not have the right tools and are not properly prepared to give the right information to the tsunami of baby boomers coming to them.
More than a year after Congress approved changes to Social Security claiming rules as part of the Bipartisan Budget Act of 2015, agency representatives continue to deny legitimate claims for spousal benefits by applicants who are clearly grandfathered under prior rules and tell other applicants they can take advantage of claiming rules that no longer exist.
The government agency marks its 79th year with close to 12,000 field offices staffed by helpful and knowledgeable people, but the administration prohibits their employees from engaging in Social Security claiming advice of any kind. Agents are therefore trained in the Social Security rules, but not in claiming strategies.
Additionally, for legal reasons, agents are required to enter your clients’ information into their records on the date they inquire about Social Security benefits, even if they are not planning to begin receiving benefits until a later date. Any calculations performed are based on that date, and facilitates a bias that too often results with clients claiming early.
And let’s not forget the outcry in response to recent cutback in SSA services.
Do NOT take any advise from the Social Security Administration as the Golden Rule! Get a second, third, and even fourth opinion before you file that claim. This is what WE DO at Social Security Benefit Planners. We get the facts and do our best to maximize your benefits. After all, it’s your money!!!
Approaching retirement? Have you thought about when to claim Social Security benefits?
We’ll get to the details in a bit, but first, find out what you already know about this subject by taking a quick quiz:
Full retirement age
Many people have the misconception that full retirement age is when they reach 65. But it actually depends on your birth year. If you were born between 1943 and 1954, full retirement age is when you turn 66. If you were born in 1955, it is 66 and two months. Add two months per year until you reach 1960 and beyond, when full retirement age is 67.
(If you were born in 1937 or earlier, your full retirement age was 65. From 1938 to 1942, retirement age ranges from 65 and two months to 65 and 10 months. You’ve likely already retired.)
Age and claiming
According to the U.S. Social Security Administration, you’ll generally get the same amount in lifetime benefits no matter what age you choose to file, assuming you live to average life expectancy.
But the amount you get each month can differ substantially depending on the age at which you file.
You can start claiming Social Security benefits at age 62. Many people opt to do this. As I speak across the country explaining how to plan and maximize your Social Security, I meet all kinds of people that are not getting what they are entitled to. More importantly, the Social Security Administration won’t offer that assistance. However, your monthly benefits will be about 25 to 30 percent less than if you wait till your full retirement age to file. This is why seeking advise from a Social Security Benefits Planner so you can get a forecast of what your benefits will be.
According to the United States Government, over 59 million individuals will receive approximately $863 billion in Social Security benefits this year. With numbers like that, chances are good that you or someone you know may be eligible for benefits soon. Social Security Benefit Planners answer some of the more common questions people ask about Social Security.
Do I qualify for Social Security retirement benefits?
Depending on your date of birth, the normal age of retirement (a government term related to the age in which benefits can kick in) is 65-67. Take our quiz and find out exactly how much you understand about your own Social Security Benefits. You can apply for benefits if you are at least 61 years and 9 months old, or as late as age 70.
How do I apply for Social Security benefits?
You can apply for Social Security benefits either online, or in person at the Social Security office if there is one in your city. Click on our Interactive Map and find out how we can help in YOUR State
The Social Security Administration recommends starting the application process at least four months in advance of your planned retirement, and you will need information such as your birth certificate, Social Security card, and other government-issued documents. This list published by the Social Security Administration gives the full list of documents that may be needed for your application.
When is the best time to apply?
Every individual’s needs are different, but factors that may impact your decision to collect retirement can include your health, your financial needs, your other sources of income, and your plans to work after you start collecting your benefits. This is because the total dollar amount of your benefits will vary based on how old you are when you claim the benefit and whether or not you are still working.
If you are getting a divorce, you should also be thinking about Social Security. If you were married at least 10 years and do not ever re-marry, you may qualify for benefits based on your former spouse’s earnings when you both reach age 62. The result is that you could receive the higher of benefits based on your own work history or half of your former spouse’s benefit, even if he or she has remarried.
How much Social Security am I entitled to?
As of 2014, the maximum benefit per month for a person who earned the maximum taxable earnings for 35 years or more is $2,663 per month. However, the average monthly retirement benefit is $1,328. Learn about the FACTS of Social Security
Have more questions about how to Maximize YOUR Social Security? Ask Faye Sykes, National Speaker for Social Security Benefit Planners and learn how planing now will save you time and money later.
You’ve lost your Social Security Card, what do I do? First of all, don’t panic. They’re lot’s of protections now that will alert you if your number is being used. But the most important thing to do is REPORT IT! Any time you lose sensitive personal information such as your Social Security card, it is a good idea to request an initial security alert be added to your credit report. An initial security alert is free and remains on your report for 90 days. It lets creditors know that you may be a victim of identity theft so someone could be trying to apply fraudulently for credit in your name.
The easiest way to request a security alert is by going online, although you can also request the alert by phone or by mail. To add an alert via the Internet, visit Experian’s online Fraud Center and select “Add an initial security alert.” Simply complete the form and submit it through the secure Web link. To add an alert by phone call 1 888 EXPERIAN (1 888 397 3742) and select the fraud option. Follow the voice instructions to add an alert and request a report. After you have reported it for credit reasons, now report it to the Social Security Administration
Contact the Social Security Administration to let them know the card was lost and to request a new one. For more information, please visit the Social Security Administration’s site.
How do I replace it?
It is free to replace your social security card if it has been lost or stolen. You are limited to 3 replacement cards in a year and 10 during your lifetime. Legal name changes and other exceptions do not count toward these limits. For example, changes in immigration status that require card updates may not count toward these limits. Also, you may not be affected by these limits if you can prove you need the card to prevent a significant hardship.
In order to get a replacement social security card you will need to provide documentation that proves you are a US citizen and your identity. All documents must be either originals or copies certified by the issuing agency. The social security office will not accept photocopies, notarized copies of documents or receipts showing you applied for the document. Social Security may use one document for two purposes, such as using your US passport as proof of both citizenship and identity.
Once you have the necessary documents the next step would be to print out the social security card application and fill it out. Once you fill it out and print it you need to then either take it to your local social security office or mail it to the office. Click here for the application form. If you have questions or issues about replacing your Social Security card then you need to contact your local administration office.
For more questions regarding your Social Security Benefits, or want to learn Social Security Basics? Contact Faye Sykes and learn how you can maximize your benefits.
Are you a business owner with an at-home spouse who helps out with bookkeeping or a variety of other tasks that need to be done? Once you get to retirement age it’s too late, but for those of you that are in your 20’s, 30’s, 40’s or even 50’s there’s still time to let these efforts build future benefits. Paying your spouse at least $4,880 a year will ensure that they continue to vest into the Social security system, which will help you at retirement time.
To fully vest you need to earn 40 credit hours, with a maximum of 4 credits per year at $1220 per credit. Spouses who are not vested can still pull a half benefit off of their working spouse’s retirement benefit (or ex-spouse’s, if married over 10 years). If widowed after being married 9 months or more, you can draw benefits up to your deceased spouse’s full amount, depending on what age decide to file.
If both spouses have work history the social security retirement benefits picture can drastically change for the better. With two vested partners you’ll also have more options, such as the potential for the lower earning spouse to pull earlier while delaying the higher earning spouse’s filing until age 70 to get the highest benefit. And don’t forget that social security disability benefits are hinged on a person working at least 5 out of the last 10 years, which can help when the worst happens.
As you can see, it’s in your best interest to ensure that the work both partners contribute to your business is recognized as paid employment by the Social Security Administration. We offer a pre-check social security flat fee planning option that will help you review where you are today and give you insight about the impact on future income you can make by ensuring that both spouses are being paid for the work that they do.
Please “Select a Plan” so we can get started on maximizing your social security benefits or take our quiz to find out how much you know about your social security.
Parents take care of us for so many years, and in some cases we are able to help our own parents in their retirement. But what will happen if your dependent parent doesn’t outlive you?
Very few people know about an important social security benefit that can help your financially dependent parent should you die. If your parent relies on you for more than half of their living expenses, they may be able to receive benefits after your death. In order to take advantage of this benefit you must have earned enough credits to qualify for social security – that’s 40 credit hours – and your parent must:
Receive at least half of his or her support from you
First, the age at which you claim your own retirement benefit doesn’t affect the time at which your parent can start receiving a parent’s benefit. (It is your date of death that determines that.)
Second, the age at which you claim your retirement benefit doesn’t affect the amount of your parent’s benefit based on your work record. The amount of a parent’s benefit is 82.5% of the deceased person’s primary insurance amount if there is one eligible parent. If there are two eligible parents, each parent’s benefit as a parent is 75% of the deceased person’s primary insurance amount. (If the parent is already receiving a different Social Security benefit — such as their own retirement benefit — then the total amount they will receive is the greater of the two benefits.)
We offer a FREE Quiz that you can take to test your knowledge on YOUR social security. Most often people wait until they need it the most. Don’t be that person. Contact us today! Or Call: 877-270-SSBP (7727)
So you have decided to work or retire out of the United States. How does this affect your Social Security and Medicare benefits? The answer varies by country, and it will work out better for you in certain countries than in others. It’s important to understand what is at stake. We broke down what Expats or (Expatriate) needs to know
Determining retirement benefits for expats can be a confusing and complex situation, with many country-specific rules that change over the years. If you need help navigating social security options for expats and their families, please visit our website at www.socialsecuritybp.com to learn more.
We get a lot of questions regarding Divorce and Social Security. How it works, and who qualifies for what? Filing for Social Security involves a dizzying array of choices and decisions. When should you claim benefits? What’s the best way to maximize your income? Selecting the right options isn’t easy for anyone, and for those who are divorced it can be even harder. If you’re confused by the myriad of rules and regulations around filing for Social Security as a divorced individual, keep these guidelines in mind:
If you were married over 10 years, you can claim spousal benefits. This is true as long as you meet the following conditions:
Your spousal benefit will be equal to one half of the full retirement amount your ex-spouse is qualified to receive, assuming you file at your full retirement age. In many cases, this could be more than the amount you would receive based on your own work history – if you were out of the work force caring for children, for example. If your own work record is higher than you will receive your own benefit. In either case if you file at age 62 this could reduce your benefit as much as 30% for the rest of your retirement which can cost you thousands of retirement dollars.
You can receive the full amount of your ex-spouse’s Social Security benefit if he or she passes away. If your ex-spouse is deceased you can receive benefits as a widow or widower instead of spousal benefits. You qualify for the full amount of your ex-spouse’s retirement benefit, just as you would if you had still been married at the time of death. The rules are similar to those for spousal benefits:
In both types of Social Security benefits, it makes no difference whether your spouse has remarried one or more times. These benefits are yours if you qualify based on your age and marital status, even if there is a current spouse or widow who also collects benefits.
Still confused? Please contact our office for a consultation. We’ll help you clarify your options and find your best path forward. Social Security Benefit Planners 877-270-SSBP (7727) info@socialsecuritybp.com
Business owners typically prioritize the success of their company over other financial goals. That’s a good thing in general, but it’s important to keep a balance or you could be creating a host of long-term financial problems for yourself while you’re trying to do the right thing.
A common pattern I see with my clients is that they pay themselves as little as possible and put the vast majority of the available money back into the business. That may be good for the business but it’s not necessarily a smart move for your overall financial picture. When it’s time for retirement, problems arise:
Take care of your business, but be sure to look out for your own best interests as well. Paying yourself a fair wage and investing in assets like equities and real estate are just as important as that new equipment or extra staff member your company could use. The money you pay into Social Security and invest privately will work together to give you a higher income in retirement than you’d have otherwise.
If you’re not sure how much you should be paying yourself or investing, please contact us today and we’ll help you find the right balance. You deserve a comfortable retirement!
Social Security Benefit Planners
800.270.SSBP (7727) info@socialsecuritybp.com
Worried about how your military service affects your Social Security? You don’t have to, because the retirement income you’ve earned through military service won’t reduce your Social Security benefits. In fact, if you served on active duty between 1957 and 2001, you may even be credited for extra earnings on your Social Security record.
For Social Security purposes, active duty includes active duty, reserve duty and active duty for training (ACDUTRA), and includes your service in the:
Although your benefits are not impacted by retirement income from the military, Social Security benefits for survivors may reduce the income beneficiaries receive through the Department of Defense Survivors Benefit Plan. Your military retirement advisor or the Department of Defense will be able to offer information specific to your situation.
Whenever you served, the American people thank you and wish you a happy retirement, complete with all the Social Security benefits to which you are entitled. Want assistance in understanding optimal options for maximizing your Social Security? Choose one of our plans and please use USA2017 to save $50 off any plan.
Working for a railroad means your Social Security benefits may be calculated differently than for other industries. To qualify for a pension from the Railroad Retirement Board, which maintains your record of earnings, you’ll need to have worked for the railroad at least 120 months or 60 months of railroad work that took place after 1995.
We are here to help if you would like to project what your retirement income options will look like. Please go to our “Select a Plan” to learn more and sign up and use RAILROAD2017 to save $50 off any plan.
Working inside the U.S. as an employee of a foreign government or an instrumentality of one can mean you’re not covered by Social Security. These workers include diplomats, embassy employees, non-diplomatic representatives, consular officers and employees of foreign government instrumentalities (non-commercial organizations that function on behalf of a foreign government).
Whether or not your work will be counted toward Social Security benefits is controlled by your citizenship status.
U.S. Citizens who work for a foreign government are treated as self-employed citizens are for Social Security. Your employer will not withhold Social Security taxes but your earnings can still count toward your coverage under the program. You are responsible for paying self-employment taxes on the income. Citizens who work for an instrumentality are covered by Social Security, but their earnings may be treated as employment or self-employment based on three conditions. The U.S. Department of State and the IRS will determine which category your work falls into.
Non-citizens are not covered by Social Security for work they perform for a foreign government. Their employment for an instrumentality of a foreign government may or may not be covered by Social Security, depending on same three conditions mentioned above.
Dual citizens who hold citizenship in the U.S. and another country are covered by Social Security in most cases, but depending on the country for which they are working, they may need to pay self-employment taxes or not. Dual citizens who work for an instrumentality of a foreign government may or may not be exempt from paying Social Security taxes on their earnings. Reciprocal social security agreements between the U.S. and foreign governments vary by country, so it is important that dual citizens speak with a qualified professional or governmental administrator to determine program eligibility and tax responsibilities.
If you want to understand options that pertain to your situation please go to our “Select a Plan” and sign up for one of our planning options. Use FOREIGN2017 to receive $50 off any plan.
Long-time employees of the Federal government may be confused about their Social Security benefits, and it’s easy to understand why. The U.S. government changed the retirement system for their employees in 1984, and only one of those systems include earnings for Social Security.
Prior to 1984, all employees were covered under the Civil Service Retirement System (CSRS), which did not withhold Social Security taxes from workers’ earnings. As a result, these earnings do not qualify government workers for Social Security credits or benefits.
The retirement system that replaced the CSRS is the Federal Employees Retirement System (FERS), and under this system Social Security taxes are withheld from workers’ earnings. These earnings are included in calculating Social Security credits and benefits.
Everyone who began working for the Federal government during or after 1984 is covered under Social Security, assuming a sufficient work history to earn the required 40 credits.
Federal employees who switched to the FERS program are also covered under Social Security; all the work they performed after switching to FERS is counted toward their Social Security credits and these earnings are used to calculate benefits.
Some workers who were already covered under CSRS chose to remain under that program after FERS was available. These employees have not contributed into Social Security and are not eligible to receive benefits under the program. However, they are eligible to receiver Medicare Part A coverage after they earn the 40 quarterly credits required of all participants.
We want to help you customize retirement income options socialsecuritybp.com and use FEDERAL2017 for $50 off any plan option.