Archive for May, 2014:

$100,000 bonus Social Security Claiming strategy

Written on May 28th, 2014 by Jamesno shouts

Don’t you hate teaser headlines like that?  But it isn’t a joke, it’s a legitimate strategy to get more benefits over your lifetime……..

I touched on the topic of social security claiming strategies earlier in the year, but it is still an eye opener for many clients, so thought it worthy of a second blog post.  It’s called a file and suspend strategy that allows the lower earning spouse to claim “spousal only” benefits while letting their own benefits based on their working career continue to grow to age 70.

Here is how it works:

1.  Key point:  both you and your spouse have to be full retirement age for this to work.

2.  If higher earning spouse plans on continuing to work but not lower earning spouse:  Higher earning spouse files and suspends for their own benefit which makes the lower earning spouse eligible to claim spousal benefits.

  • Lower earning spouse files a restricted application with the SSA for “spousal benefits only”.
  • Lower earning spouse continues to claim spousal benefits up to age 70, where they then switch over to their own accrued benefit that has grown at 8% per year from full retirement age to age 70.
  • Higher earning spouses benefit has continued to grow at 8% per year because they restricted their application to a file and suspend strategy.  Now at age 70 they take their full benefit that has grown considerably during that period.
  • this strategy could add well over $200,000+ in cumulative benefits if both spouses make it to age 90.

3. The other strategy is simply that both spouses are full retirement age (66) and both decide to retire.  The higher earning spouse takes their benefit and the lower earning spouse follows the same procedure above.  (files a restricted “spousal only benefit” and then at age 70 switches to their own accrued benefit).  This strategy still could add over $100,000 in cumulative benefits in retirement.

Of course each couple is unique and every strategy needs to be customized, but taking a few minutes to develop a Social Security claiming strategy that could potentially get you $100,000 more over your lifetime seems like time well spent!