Today is my birthday and since I am one year closer to Social Security, I figured it was worth sharing some of the best and worst tips on Social Security I have learned over the years. So, be ready for some bullet-point action here.
- Do NOT assume you know everything about all of your benefits. I read recently there are 576 different methods for claiming your Social Security. This involves over 2,700 individual primary rules and thousands more of secondary rules. Odds are there are benefits you may be entitled to you are not aware of and also benefits you thought you were entitled to but are not.
- Do NOT wait past age 70. While waiting until age 70 could drastically improve your benefit level, there is NO benefit to waiting beyond age 70. This Delayed Retirement Credit is only good until then.
- Patience and timing with benefits claiming is key. I’ve talked before about how waiting to claim your Social Security at age 70 could increase your benefit by 76% after inflation, than if you had taken it at age 62. Additionally, if you are able to collect two benefits you may want to take one early and delay the other one. This is because you cannot actually take two benefits at the same time, however, if you time benefits correctly you can take one early and let the other one delay and grow for later use.
- Working longer may result in higher benefits. Yeah, this seems pretty common sense, but I need to mention it. The longer you work the better the odds are your Primary Insurance Amount (PIA) will increase. PIA determines your own retirement benefit as well as any auxiliary benefits to selected other family members. In short, there is a Recomputation of Benefits that replaces one of your previous 35 highest-earnings years with your latest year’s earnings if it’s higher.
- Remarrying can cost you…bigly! If you are divorced and then remarry, you will not be entitled to a spousal benefit based on your ex’s work history as long as you are remarried.
- Don’t get it in writing. There is a Remarks section on your Social Security benefits application. You need to put in this section the benefit you are applying for and when you want to start receiving them. This is just in case you don’t get the benefits you applied for. If this happens, having your written instructions in the Remarks section will help as you appeal.
- Assume rules won’t change. While the majority of Social Security rules won’t change, we have seen recently where some rules have been modified. File and Suspend is a perfect example. Again, while the odds may be slim the rules won’t change, don’t assume they won’t as the existing rules governing Social Security give it lots of flexibility to modify.
- Social Security staff is always correct. As I mentioned above, there are so many freakin’ rules and different methods to claim benefits no one person can know it all. Hell, Social Security even sent its staff misleading statements about the new law in 2016.
My point here is to make sure you are spending a bit of time doing your research and investigating before you actually start any Social Security benefits. You really need to measure multiple times before you make the cut to start Social Security. And when in doubt, talk to your CFP® as they should be proficient.