Rick Loek walks through Social Security filing strategies between ages 62 and 70. Filing at 62 cuts your monthly benefit by roughly 25 percent, while delaying increases it about 8 percent per year. Spousal benefits add complexity, and depending on your income, some of your benefits may be taxable.
Questions this video answers
Anywhere from age 62 through age 70.
Approximately 25% less.
About 8% per year (simple).
Married couple income over $32,000; single person income over $25,000 (50% included).
Married couple income over $44,000; single person income over $34,000 (85% included).
Chapters
Before we start, let us state that there are thousands of variations for how you can claim Social Security benefits, from the simple to the very complex. One example is filing a claim against a former spouse's Social Security or even to file against a deceased former spouse. Social Security and Medicare touch four of our five key elements to an effective financial future.
After speaking with several people, we have learned that some people are confused about Social Security and Medicare. Today we will be discussing Social Security. Maximizing Social Security is not about gaming the system. This is about taking care of you using the rules and provisions that exist in the code. This is a system that you have to have paid into in order to receive benefits.
Working with financial numbers. Some people like them and some people get confused. See our website for numbers and examples. That website is I the letter ixraysocialsecurity.com.
When can you file for Social Security?
In the simple cases, anywhere from age 62 through age 70. What you need to understand is the upside and downside of filing at different ages. Starting at age 62 will certainly yield more checks over time. However, your benefit checks will have less money initially, 25% less. If you file later. You will receive an 8% simple interest increase in your monthly benefit when added to COLA or cost of living adjustments. This could be 10% or more per year that you wait. We will discuss COLA shortly.
Spousal Benefits.
Complex and not as easy as people seem to think. Yet this is the most important topic for couples to understand.
The main breadwinner starts at 62. While this could have an adverse effect on the surviving spouse, which, keep in mind could be the main breadwinner.
COLA or cost of living adjustments is one of the best benefits of Social Security in my opinion.
COLA means that the payment will increase over time. I realize that it might not keep pace with the actual increasing costs of life. It does however, do much better than most pensions. Dare we forget to mention taxation of Social Security benefits? Some people are still surprised to find out that Social Security benefits can be taxed. The thresholds for this taxation are very low and and not currently set to adjust for inflation.
A married couple having income over $32,000 or a single person with income over $25,000 will see 50% of their Social Security added back to their taxable income and then taxed at their tax rate.
A married couple having income over $44,000 or a single person with income over $34,000 will see 85% of their Social Security added back to their taxable income and then taxed at their tax rate. Here's the kicker. 50% of the Social Security benefit is included in the calculation of income called provisional income. Don't forget those tax free municipal bonds are not so tax free. They're also part of the calculation of your provisional income. We work with people to see if there are strategies that can be applied to help reduce or potentially eliminate the taxation of their Social Security.
Here is what you need to do.
You need to realize that a failure to plan is a plan to fail. We suggest working with someone who can help you.
Note that Social Security office does want to help. As we understand it, they are forbidden from helping and what we mean by help is is providing advice. Time and time again people share their stories of going to the Social Security office to find out that they can't get advice.
Not that these people don't want to help or that they don't possess the information.
Call us now to receive your complimentary custom Social Security report using your specific information. Our toll free number is 866-589-9366. We have custom software that helps us guide you to what is best for you and your circumstances. An informed decision is almost always the best decision. See our website ixraysocialsecurity.com to request our Social Security White Papers.
