Social Security Benefits—How to Get a Bigger Check
Sure you can start your social security benefits at age 62, but is that wise? In most cases not. In most cases, given average life expectancy, you earn more by waiting until your full retirement age to start benefits. If you’re married, you have even greater flexibility and opportunities to get higher social security benefits.
One set of researchers found that for married couple, having the lower-income spouse start benefits at age 62 and for the higher income spouse to defer benefits to age 70. The lower income spouse should start as early as possible because their “penalty” for starting early disappears when the higher income spouse dies (the lower income earner can then collect the deceased’s benefits).
Another little know tactic is the “file and suspend” provision. This allows the higher income earning spouse to file for benefits at his full retirement age yet suspend the actual collection of benefits until later. The suspension of collecting benefits allows the benefit to grow through age 70. Yet, as soon as the higher income spouse files, the lower income spouse may start collecting benefits at 50% of the higher income earner’s rate.
If your situation changes after you begin benefits, you can exercise the little know “do-over” provision. In such a case, you pay back all of the social security benefits you have received (without interest!). You can then re-file when you want your benefits to start thereby allowing you or a spouse to collect more. If you have no problem sending the government a large check, you may want to start your benefits at age 62 knowing that you can always exercise the do-over provisi0on and reverse your earlier filing.
You can use this limited information above to tell if your retirement advisor is any good. Most financial advisors know little about social security because there’s nothing for them to “sell.” Knowledge of social security won’t make then any commissions. However, more competent fee-based retirement planners will charge a fee for their time in analyzing your social security options and help you maximize the decisions and get thousands more in your pocket.
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March 13th, 2009 at 7:20 am
During these tough economic times that the United States has been facing, it could get discouraging to think about retirement. It used to be that people would work hard their whole lives to plan for one day being able to have a relaxing retirement. Although, because of the financial hardships that many of us are facing nowadays, it seems that a lot of people are having to put off their retirement to continue working a few more years. If this is the case with you, and you are having to put off retirement due to financial problems, it might be wise to consider opening a 401K retirement plan. This can give you the security you need to know that one day you will be able to have that relaxing, stress free retirement that you’ve long deserved.
April 8th, 2009 at 8:50 am
Most retirees and those looking forward to retirement do not know these little known facts. I have tried explaining these same facts to older family members who are receiving benefits already and could receive add to their SS benefits by do this but they don’t believe me. Do you know why?
“Well, they surely would have told me this when I’ve gone into SS office if it was true.”!!
My guess is most of the “clerks” are not trained well enough to know this information to pass it on, or SS adm. does not want it promoted.
Thank You for the delivering much needed information.
April 12th, 2009 at 11:29 pm
United States recently facing an economic inflation and crisis on every sector.
It is used to that people who would work hard on whole lives to plan for one day being able to lead retirement session.Well, I want to get the information physically presenting there,i think it will reflect exactly that has been mentioned here exactly.
April 18th, 2009 at 7:32 am
In these days when our economic goes to tough stage we must think about retirement. lots of people work hard whole life to secure their retirements.
they take all need like retirement plans to secure their relaxing, stress free retirement in future.
April 20th, 2009 at 11:48 pm
Most of the retire people or those who looking for the same do not know this information. even in the SS office staff also not know about this. this is very useful information shared.
Thank you for all this information
April 22nd, 2009 at 2:27 pm
When people are thinking about transitioning to retirement, they should seek the advice of a fee based financial consultant to determine the probability of success. A financial plan is an excellent tool for someone to better understand their financial ability to retire while taking into account when, or when not, to receive social security. What may appear to be a clear cut answer, one should always understand all the ramifications and how they interrelate with the the assets that are available to draw upon before making a decision.
Just like a business has a business plan they use as a road map to guide them over a five year period, every family should should adopt their own family business plan in the form of a personalized financial plan.
GTudors last blog post..Credit Card Crisis
April 24th, 2009 at 5:48 am
Unfortunately most people are not planning their retirement until it is too late. Luckily I think that the youth today are far more aware of the importance of starting out early than their parents and grandparents. The is no longer the “job security” and you’ll have to take care of yourself because nobody else will.
April 24th, 2009 at 11:59 pm
I never heard of this before. Interesting one can collect while other wits to make thier benefits higer. Seems like a win but not sure if it effects spouse benefits after others death. Have to look into this one.
Best etf funds lits last blog post..Oil etf.
May 7th, 2009 at 3:54 am
During the current global recession people are preparing for retirement even more poorly than normal. Personally i have no great hope for the national pension by the time i would be due it, and feel i must store up money from property and investment to keep my head above water when i am “fortunate” enough to retire!
“Most financial advisors know little about social security because there’s nothing for them to “sell.” - This was a good point that people should consider with their IFA. Essentially, they are salesmen and where there is no benefit for them, we must research everything ourselves!
Claude Monets last blog post..Poppies Blooming Claude Monet
May 7th, 2009 at 12:28 pm
The media has made it seem impossible or irresponsible to get loans, however there are still some reputable companies that are willing to walk you through the process.
Just because you lost much of your savings or it might be necessary to get more out of your social security doesn’t necessarily mean that your dream of a retirement to Florida (or California, or Arizona, or anywhere for that matter) are out of reach. In fact, real estate prices are dirt low in these places.
But I digress, my nephew in high school even now learns the benefits of waiting to cash in on social security and other benefits. While the allure of money now is always hard to resist, the benefits in the end make it more than worth it. I think we’re fortunate to have a future generation of fiscally responsible people, or at least people who learned how to be fiscally responsible (to be fair, whether or not they are we don’t know).
Ernie @ south florida loanss last blog post..Learn and Earn from Blogs: Detriments of Product Reviews
May 12th, 2009 at 10:31 am
The “do-over” provision sounds like a good idea, especially if you’re afraid Social Security benefits will be significantly cut back as the Baby Boomers place a larger burden on the system. While in the past it might not have made sense to accept less to get the benefits early, serious consideration needs to be given to the solvency of the social security system itself. Even higher taxes just won’t be tolerated by the future working class.
May 14th, 2009 at 3:46 pm
The “File and Suspend” tactic is by far one of the most powerful ways to maximize your retirement benefits.
Unfortunately, not many advisors even know about it.
Thanks for sharing these tips.
May 28th, 2009 at 1:42 pm
In current economic situation in USA its really very tough to think about retirement. Even then proper and planned steps can help people getting a big check after retirement. And u people have showed the ways in a very inspiring way. Specially the “File and Suspend” tactic. Thanks for sharing this wonderful piece of tips with us.
Jenifers last blog post..Loan Modification on Full Demand
June 25th, 2009 at 12:21 pm
I am currently receiving social security benefits. If we have negative inflation in 2009, would my benefit be reduced in 2010?
June 29th, 2009 at 2:25 am
I don’t even think I can ever retire. Social Security is in the toilet right now
June 30th, 2009 at 12:04 pm
We have decided to contribute to a private retirement fund for all of our permanent employees as of January 2009. We would like to help our employees so they have additional funds available when they retire.
July 8th, 2009 at 4:55 am
it’s amazing to me that this stuff is so complicated. i doesn’t surprise me, mind you, but is still amazing. From someone who will never see a dime in social security, I would say, enjoy the fruits of your labor to the hilt. Be smart and live well. Having said that, I think the whole idea of retirement is changing, but that’s probably another discussion. i’ll pass this on to folks i know who are dealing with this stuff.
July 9th, 2009 at 1:40 am
The information you provide here and in the rest of this blog is without a doubt the most informative I have found regarding retirement information. I was searching about 6 months ago as my father was not handling things very well with his retirement and finances and was trying to find as many ways that I could help, or figure out how he could get help. I didn’t find your site then but from today I will be having a great time sorting through the various options, some of which are most definitely available to him especially I think this “file and suspend” provision will work with himself and my step mother.
Thanks for the great information and I will be back to get the rest, and to keep myself informed for when the time comes for me to look further into tricks and tips but also make a bit better plan for myself so I don’t end up with the worries and headaches like my father has, or like he has unintentionally passed on to me (I am not grumbling Dad).
Excellent stuff
Regards
Adirec
July 16th, 2009 at 10:00 am
Thanks for all the great info, as quite a few of us are thinking about retirement plans nowadays. I suppose if you are single, the same game plan remains…wait until 70 before claiming retirement benefits?
July 21st, 2009 at 8:37 am
In these days when our system goes to strong traveling we moldiness think almost withdrawal. lots of grouping activity merciless unit story to tightened their retirements.
they select all status equal retirement plans to secured their restful, articulate free withdrawal in prospective.
July 23rd, 2009 at 4:23 am
Eyeopening article. People are a bit reckless in starting the insurance cover early in their career and they rue at their fag end. Social security is highly needed in these volatile economic conditions especially for the old spouses.
July 30th, 2009 at 6:46 am
It is used to that people who would work hard on whole lives to plan for one day being able to lead retirement session.Well, I want to get the information physically presenting there,i think it will reflect exactly that has been mentioned here exactly.
Thanks for sharing these tips.
August 5th, 2009 at 3:54 pm
I haerdthat this is a good idea only if you ujse the money to make money and can pay it back. If you can get interest from a bank that pays good and not use the money it sounds like a good idea to take it at 62 then pay it back so you get more at 65.
August 15th, 2009 at 6:24 am
Interesting stuff. I never realized you could file and suspend. I do think one thing that should be mentioned in determining at what age you will start receiving social security is your expectation as to inflation.
In the current era of record fiscal and monetary stimulus its possible we will incur some significant inflation, which the CPI is shown to undermeasure.
For someone who doesn’t need the social security payments yet, they might consider making extra payments on their mortgage.
August 27th, 2009 at 11:20 am
The dollar will fall withing next 5 years - everyone will be getting bigger social security check. It’s just going to be worth less. Thanks for the post.
August 29th, 2009 at 2:25 pm
By law, Social Security benefits cannot go down. Nevertheless, monthly payments would drop for millions of people in the Medicare prescription drug program because the premiums, which often are deducted from Social Security payments, are scheduled to go up slightly
auto club
September 1st, 2009 at 4:22 pm
hey Bob,
Steve, aka the “show booths” guy
Great article. It saddens me to see so many people start partial payments at 62. I guess they’re anxious to get what’s coming to them, but they don’t realize that if they live long enough for it to really matter… they won’t get as much as if they’d just WAITED! Still, all these people “short changing” themselves may help keep the system going a few more years…
September 11th, 2009 at 6:01 am
Many people take social security at 62 without any analysis or thought. For them it is some extra money in their pockets now, even if they continue to work. It is very short sighted. With political uncertainty in the U.S. and cuts to social security probable it is imperative to leave all options open. The decision to take social security is a one time deal, except for strategies listed in this post, so rushing to take social security early is a big mistake. People need to be ultra cautious about when to do this.
October 3rd, 2009 at 10:21 am
Thank you for the advice on how to get a bigger social security check. Althiough the waiting until full retirement age can be a problem for some people, it is is helpful to understand how much of a bigger check will be recieved by doing this. The “file and suspend” provision is worth looking into for those who are able to do this financially and for many this provision just makes good sense.
October 3rd, 2009 at 9:21 pm
I recently met with my accountant and he said that the average person will never be able to retire on their savings. Social security is the only thing that will help get people through retirement, but even that is uncertain.
October 5th, 2009 at 10:11 am
In current economic situation in USA its really very tough to think about retirement. Even then proper and planned steps can help people getting a big check after retirement. And u people have showed the ways in a very inspiring way. Specially the “File and Suspend” tactic. Thanks for sharing this wonderful piece of tips with us.
Jacuzzi Dimensions
October 6th, 2009 at 7:20 am
I’ve never heard of this “do-over provision you reference in your article. Seems like an awfully friendly option for a government backed plan. Unbelievable that it is interest free also. I’m definitely going o have to do a little digging on this option. Thanks for the help.
Johnny Blaze
Advocate For The Electronic Cigarette
October 28th, 2009 at 5:12 am
No wonder how little i know about social security benefits. It is never too late for anything, at least i am considering to educate myself on retirement income now. I have a question bob, what if the higher/lower income partner dies before 62? Will the other partner will be benefited? How?
James
November 5th, 2009 at 3:23 am
Great information about retirement benefits. I know a little about this before reading this post. I would also agree that young adults will start thinking about their retirement benefits starting today.
November 6th, 2009 at 5:33 am
Yeah it is kind of sad about social security benefits now a days. It seems that so many more people are working longer because they can not afford to retire. I watch my parents working part time just to hold on to their health benefits and make extra income otherwise they could not survive. I wish there was something that I could do; it makes me wonder what is going to happen to my husband and I when we reach that age; especially since the system is going to just get worse.
November 10th, 2009 at 12:49 pm
Social security will never drop, can only go up, in my opinion. So this is an intriguing article on increasing it.
November 14th, 2009 at 4:12 pm
I do alot of investing, and i feel terrible for everyone with their retirement fund invested in Lehman Brothers and Washington Mutual before 2008.
November 14th, 2009 at 8:10 pm
At present day while our financial goes to rough period we must reflect about giving up work. A huge number of people work tough their entire life to safe their retirements.
They get all require like retirement plans to safe their peaceful, tension free retirement in next day.