4 Strategies for Boosting Your Social Security and Spousal Benefits

By on October 1, 2014

Submitted by John Strassman −

Here are four strategies couples can use to help increase their combined Social Security income.

These approaches were written into Social Security law to encourage retirees to delay taking benefits, reducing costs for the Social Security trust fund. To use them, you must both be at “full retirement age” (eligible for 100% of your Social Security benefits) in all but one case. Full retirement age is 66 to 67, depending upon when you were born.

1. Claim spousal benefits instead of your own

If you earned less than your spouse, your benefit checks will be smaller. But you might get a bigger check by  “restricting” your application and claiming spousal benefits instead—half your spouse’s full retirement check.  (Your spouse loses nothing.)

Example: Your spouse’s full monthly benefit is $2,000. You get $1,000 in spousal benefits. Your combined Social Security income is $3,000.

2. Pump up the survivor’s benefit

Social Security has a survivor benefit for widows and widowers—100% of the deceased spouse’s checks. If you’re older than your spouse and earned more, you can inflate his/her survivor’s benefit by waiting until 70 to claim your benefit, says James Pavletich, who, with his wife, Jan, became consultants after long careers in the Social Security Administration.That grows your checks 8% a year. If you die first, his/her survivor benefit is 100% of your supersized check.

Example: At your full retirement age, 66, you’d receive $2,200 a month. But waiting until 70 increases your benefits 8% a year, to $2,904. Your checks are larger and so is your spouse’s survivor benefit.

3.  File and suspend

If you’re the bigger earner, file for benefits at full retirement age, but hold off (“suspend”) taking them. That lets your spouse claim a spousal benefit from your work record while your payout keeps growing at 8% a year until you’re 70.

Example: You and your spouse are both 66—your full retirement age. Your spouse wants to retire. Social Security will pay him/her $900. Your checks would be $2,200. If you file and suspend, waiting four years to collect, your spouse can collect a spousal benefit of $1,100 now and your benefit keeps growing, to $2,904 a month.

When you collect at 70, your spouse can “revert” to his/her own benefit, now 8% a year larger, or $1,188, according to Pavletich. Together, you’ll pull in a combined $4,092 a month. If you die first, your spouse’s supersized survivor benefit is $2,904.

4. Claim some now, and more later

You’re at full retirement age. Your spouse, 62, has a few years to go. You could both file now. You’d get $2,000. Your spouse would get $700 (70% of his/her $1,000 full benefit for claiming early). This is the strategy most couples use.

But, can you both live with smaller checks for a while? If so, you could claim a spousal benefit while letting your own benefit—the larger one—grow.

Example: Your spouse gets $700 monthly, you receive $500 in spousal benefits—$1,200 a month total. When you’re 70, claim your benefit—now $2,640. Your combined monthly Social Security income is $3,340. Also, your spouse’s survivor benefit went from $2,000 to $2,640 a month.

Calculate your Social Security benefits and talk to your financial advisor today. For more information, visit the Social Security Administration website at www.ssa.gov.

 

John Strassman, CFP  and Kevin Hanna met at a major brokerage firm.  After working together for several years they discovered they both had the same compelling desire to have a business that was based on really knowing and understanding their client’s goals, aspirations, concerns and motivations. John and Kevin soon realized that was not going to happen where they were, so they launched Strassman & Hanna Wealth Management. With over 40 years combined experience they are committed to superior customer service based on a foundation of sound financial advice and guidance, great personal service and an extensive array of services.  For more information, visit www.yourlegacymatters.com.  Connect with John and Kevin on LinkedIn and Facebook.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which course of action may be appropriate for you, consult your financial advisor.  This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

Social Security Consultants and its representatives are not affiliated with LPL Financial.  This material has been prepared by LPL Financial. A registered investment advisor, member FINRA/SIPC.  To the extent you are receiving investment advice from a separately registered independent investment advisor, please note that LPL Financial is not an affiliate of and makes no representation with respect to such entity.

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4 Strategies for Boosting Your Social Security and Spousal Benefits