I recently came across a handy life expectancy calculator that changed the way I illustrate Social Security benefits over a couple’s lifetimes. Click here to read my article, which contains a link to the calculator.
Even if you don’t play golf, you may be familiar with the concept of a “mulligan.” Although strictly speaking it is against any version of the rules of golf, in casual play (typically involving players of lesser ability) a group may agree that a player may replay a poorly hit shot without penalty. Usually the opportunity for a mulligan is limited to the first shot on the first tee, the theory being that the player might have rushed to the golf course with no chance to warm up or practice, and thus the first shot is considered compensation for having arrived in a lather without leaving time to prepare. I once played with a group that allowed each player a “hooligan” – best described as a “floating mulligan” – meaning that one poorly hit shot could be replayed without penalty at any time during the round.
The Granddaddy of All Hooligans. Under the Social Security system, there used to be a rule that allowed you to begin receiving your benefits at age 62-1[1], continue receiving them for nearly 8 years and then, just before you reached age 70, you could decide to repay all the benefits you had received with no interest and start all over at age 70 with maximum benefits. But after articles began appearing in the financial and popular media touting “interest-free loans from the government,” the SSA decided in December 2010 to shut down this opportunity. (more…)
Spousal claiming strategies are among the most complex, but fruitful areas to consider for couples who are at, or approaching, Social Security eligibility age. An article of this size can barely scratch the surface, but in it I will identify and illustrate a few of the major issues and strategies. (more…)
If I had to describe my practice in one brief paragraph, I would say I have four principal areas of focus:
1. Raising awareness about the complexity of the Social Security system and the opportunities it affords – by writing about the topic and presenting seminars
2. Analyzing an individual’s or couple’s Social Security picture in light of their expressed priorities
3. Explaining the most promising options available to them
4. Encouraging them to make their decisions with the help of their financial advisor
What I DON’T do is tell them what they “should” do. read more
How to Obtain Your Social Security Statement
If you are approaching eligibility for Social Security retirement benefits – or are already past age 62 – you are used to receiving your latest statement in the mail every year. You may or may not have noticed that you didn’t receive one in 2011, but depending on how close you were to filing for benefits you may not have cared very much either way.
Getting Your Current Statement
The Social Security Administration stopped mailing statements in 2011 as part of a cost-cutting effort, but resumed sending them in 2012 to people over age 60. I have recently learned that the mailed statement program will gradually go the way of the dinosaur, and that eventually we will all be required to obtain our statements online. 2012 also marked the launch of an SSA online initiative, which includes the opportunity for most of us to create an “account” and obtain our own statements on the SSA website.
I set up my account sometime last year and hadn’t been back there since September 2012 – until today. I went back today after I learned that it’s getting tougher to create one’s own account; I wanted to see if it would be tougher to get back in.
In 2013 SSA launched an even newer online initiative called my Social Security, which is intended to become a versatile portal for all things Social Security – and some things Medicare. (more…)
In Part 1 of this series we reviewed how to obtain your Social Security statement and looked more closely at some of the items that appear on page 1. In Part 2, we focused on Page 2 of the statement, with particular emphasis on how your retirement benefit estimates are calculated. Now, we are ready to proceed to:
Part 3. The highlight of Part 3 is your Social Security Earnings Record. In Wanda’s statement, her earnings record is fairly short, as she did not begin her working career until 1989. Also notice that the two columns – Your Taxed Social Security Earnings and Your Taxed Medicare Earnings – are exactly the same in Wanda’s case. This is because all of her earnings were below the Social Security wage base, which was $110,100 in 2012 and grew to $113,700 in 2013. (more…)
In Part 1 of this series we reviewed how to obtain your Social Security statement and looked more closely at some of the items that appear on page 1. Now, we are ready to proceed to Page 2 of the statement.
Here’s where it gets interesting! Starting at the top, under Retirement, we look at, but often don’t see, the following language, which I’m going to bold for emphasis: “At your current earnings rate, if you continue working until…” We then see figures estimating our benefits if we file for benefits at various ages.
If you are 60 years old, the benefit ages shown will be 66, 70, and 62. If you are already 64, the ages shown will be 66, 70, and 64. In our sample statement, Wanda Worker will be 40 years old in April 2013. That means that her Full Retirement Age will be 67, under current rules, and thus the estimates are for ages 67, 70, and 62. But the key point here is that those estimates are based on the assumption that she will continue to work and earn the same amount that she earned the previous year (or the year before that) until the age in question. (more…)
If you are approaching eligibility for Social Security retirement benefits – or are already past age 62 – you are used to receiving your latest statement in the mail every year. You may or may not have noticed that you didn’t receive one in 2011, but depending on how close you were to filing for benefits you may not have cared very much either way.
Getting Your Current Statement [This is new material!] (more…)