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Clarksville, TN – There’s no doubt about it. Filing for Social Security can be daunting.
On top of all that, there’s a ton of information – and misinformation – to weed through, as well as the need for some calculations based on several variables. Your benefits depend on your age, how long you’ve worked, what you earned, your marital status and number of dependents.
Seems like you have to factor in everything but your IQ. So to help, we offer some common misconceptions as well as some guidance on ways to get the most from your hard earned retirement benefits.
There are several factors to consider:
Myth No. 1: Social Security Won’t be Around when I Need It
However, the trustees have projected that any existing surplus could be depleted sometime between 2033 and 2037, if no further legislative action is taken. This could mean that future retirees may be paid some portion, between 75% and 80% for example, of the benefits promised, but not zero like many fear.
Myth No. 2: Social Security is All You Need
Retirees received an average of $1,341 in benefits for the month of January. Even if you live frugally, that amount likely will not be enough to account for all the variables you might encounter over a decades-long retirement. That’s why it’s important to do what you can to maximize all your retirement savings for as long as possible (think taking full advantage of your employer’s 401(k) match).
Myth No. 3: File as Early as Possible
Higher earning spouses, in particular, may want to delay as long as possible, not just to maximize their own benefits, but to ensure a higher payout for their widow or widower when the time comes. Surviving spouses are eligible for 100% of their spouse’s benefit.
Myth No. 4: File as Late as Possible
On the other hand, retirees who want to have the most income during their prime years may want to file early, too. Should you change your mind, you can claim a do-over within the first year, but you have to pay back what you received. If longer than a year, you can voluntarily suspend your benefits at FRA and then earn delayed credits until age 70.
Myth No. 5: You’ll Lose Benefits if You Continue to Work after Filing a Claim
Myth No. 6: You’re Out of Luck if You’ve Never Worked Outside the Home
If you’re a surviving spouse, you may be eligible for full benefits on your spouse’s record. Even ex-spouses can claim full survivor benefits as long as you were married for more than 10 years and never remarried before he or she passed away. Of note: remarriage after age 60 does not prevent or stop entitlement to benefits for survivors – even ex-spouse survivors.
Myth No. 7: Follow Advice from Friends and Family
Sources: ssa.gov; investopedia.com; forbes. com; thefiscaltimes.com; marketwatch.com; cnnmoney.com
Frazier Allen, WMS, CRPS, Financial Advisor with F&M Bank
Web Site: http://www.raymondjames.com/frazierallen
Topics401K, Clarksville TN, retirement, Social Security
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