Deciding when and how to claim Social Security benefits is one of the most important financial decisions that most retirees will ever make. Despite changes to two key claiming rules that took effect last year, there are still enormous opportunities to maximize lifetime benefits for married couples, divorced spouses, survivors and dependents.
Individuals who were at least 66 years old and who filed and suspended their benefits by the April 29, 2016, deadline are grandfathered under the old rules. The action triggered benefits for a spouse or dependent child, even if the family members become eligible for benefits after the deadline. Meanwhile, the worker’s own retirement benefit continues to grow by 8% per year up to age 70.
The one date you need to know about the new rules for married couples and divorced spouses: Jan. 1, 1954. Eligible individuals who were born on or before that date can still claim only spousal benefits when they turn 66 and collect half of their mate or ex-mate’s full retirement age benefit while their own retirement benefit grows by 8% per year. At 70, when the delayed retirement credits end, they can switch to their own maximum benefit.
Ex-spouses who were married at least 10 years, divorced and currently single can collect on their ex’s Social Security record as if they were still married. Divorced spouses born on or before Jan. 1, 1954, can claim only spousal benefits — even if their ex has not yet claimed benefits — if both former spouses are at least 62 years old and they have been divorced at least two years. Ex-spouses born after that date must file for their highest benefits based on their age at time of claim.
Social Security beneficiaries can change their mind and withdraw their application for benefits within the first 12 months of claiming them. But there’s a catch. They must repay all the benefits they have received and any family benefits collected on their earnings record. Later, they can restart their benefits at a higher amount based on their new claiming age.
If they miss that 12-month window, they can voluntarily suspend benefits — but not repay — to earn delayed retirement credits of 8% per year up to age 70. They cannot collect any benefits during the suspension period nor can anyone collect benefits on their record during that period.
There are more…If you want to maximize your Social Security Benefits, have Social Security Benefit Planners set up a strategy for you. Select a plan and let’s get to work.