How to Maximize Your Social Security Benefits

Retirees often sign up for Social Security payments as soon as they possibly can, at age 62, and who can blame them? It is a benefit for all of their hard work.

In about seven years, the cost of Social Security will exceed tax revenues, or the money going out will be more than the money coming in to fund the program, according to the most recent Social Security Board of Trustees report. Additionally, the trust fund is expected to be exhausted in 2037.

However if claiming Social Security at age 62 you probably won’t get the highest payout out of the program that you can.

3 strategies that could significantly increase your Social Security income for the rest of your life

Delay Claiming Social Security

Social Security benefits are a significant source of income for many retirees. To maximize your benefits, wait until your full retirement age to file for Social Security benefits. Choosing to receive your benefits early will significantly reduce your monthly benefit check. However, delaying claims until after your full retirement age can increase your benefit by hundreds of dollars a month.

Married couples at full retirement age should look into suspending a working spouse’s benefit while applying for a stay-at-home spouse’s benefit. Or, if you both work, file a restricted application so one spouse can receive a spousal benefit while delaying collecting his or her own benefit until age 70.

One Payout Example: Early (age 62): get $750/month

On Time (66): get $1,000/month

Late (70): get $1,320/month

Don’t Forget to Get Your PEBES

As long as you are working, keep track of your future Social Security benefits with a copy of your Personal Earnings and Benefit Estimate Statement (PEBES) from the Social Security Administration. This statement lists the number of years you are credited for working, and based on your estimates of future income, projects the size of your benefit upon retirement at age 62 or your full retirement age.

Why should you make a point of getting your PEBES? Seeing the actual figures may stimulate you to evaluate and possibly change your current job. It also allows you to catch errors in your earnings record. If you have been working for other employers rather than for yourself, it is especially important to make sure that each statement has reported all of the time that you worked. The longer you wait to correct an error, the harder it may be to find your previous employer or accurate documentation of the time you worked. You should receive a PEBES statement automatically in the mail annually. If you don’t get one, you can order a statement by calling (800) 772-1213.

Stay Out of “Suspense”

Have you changed your name due to marriage or divorce? Have you used a nickname, such as Mary, instead of your full name, Martha? Have you signed some of your employment records as Martha Jones, M.D., spent a few summers working in a bar at the beach, or picking artichokes in California? People who change their names, use a nickname or a title, or work in service or agricultural businesses are most vulnerable to losing Social Security credit for their earnings.
How could this happen?

When Social Security receives a W-2 or self-employment tax form with a name and Social Security number that don’t match, the agency refers it to the suspense file. After the reports are subjected to several manual and computerized processes, the yearly average of reports in the file is about 1.5 to 2 percent. If some of your earnings are in that file, you could receive a lower benefit than you deserve, or, if you can’t prove that you’ve worked the minimum of ten years required, you may not qualify for any benefit at all.
Here are some ways to make sure that your earnings don’t end up in the suspense file, which contains $200 billion in earnings:

• Make sure that you are using exactly the same name on all of your employment records— that’s the one on your Social Security card.
• If you change your name for any reason, report it to Social Security by calling the toll-free number.
• Read your Personal Earnings and Benefit Statement carefully. If you see a zero or lower income than what should be there, collect evidence of your employment, W-2 forms and, tax forms, and call Social Security to arrange to have the missing earnings credited to your account.

Remember you are probably the only person who can get your earnings out of suspense. To determine your full retirement age or to get information about various options go to www.ssa.gov/.

Source:

BANKROLL YOUR FUTURE: How to Get the Most from the Government for Your Retirement Years, by Ellen Hoffman

Article by Wil G.

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