Timing Social Security benefits
New law changes options for couples
Deciding when to start collecting Social Security benefits is an important part of retirement.
By May 1, 2016, one of the strategies to vary the timing of receiving benefits, called “file and suspend,” will end. This strategy had allowed couples to collect a spousal benefit on an account but suspend the main account holder’s Social Security payments, resulting in an 8 percent increase to their benefit payments for each year of delay after full retirement age. The law will not affect those who turn 66 and “file and suspend” before May 1, 2016.
How can you still make the most of your Social Security benefits? Well, that depends on how long you plan to work, how much retirement income you need and your current financial situation.
Here are three tips to help you think about it:
- Separate the decision to retire from the decision to collect Social Security. It may or may not be beneficial to do both at the same time. Remember, what worked best for friends or family may not be the best strategy for you.
- You can still earn credit for delaying retirement by delaying/suspending your Social Security benefits when you reach full retirement age. However, because of the new law, no benefits will be paid to family members while an account is suspended.
- If you turned 62 by Dec. 31, 2015, you may still be able to take a spousal benefit. To do so, you need to wait until your full retirement age, and your spouse needs to be drawing his or her benefit at the time.
Talk with your financial advisor to determine the best plan for your retirement.
Chris Scherer, ChFC®, RICP®, is a Financial Advisor for Everence based in Goshen, Indiana. Learn more about Christine at everence.com/michiana.
Getting ready for retirement
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