My article about little-known strategies that can enhance your Social Security income in the Sept/Oct issue of AARP Magazine ('Boost Your Income!') has generated a flood of email from readers. I'll be addressing the most frequently-asked questions about that article in this space over over the next few weeks.
(Sorry, guys, I can't answer each email personally!)
But let's begin with some general advice for everybody:
Your first step should be to read your Social Security personal benefits estimate. This is a four-page document that every worker over age 25 receives in the mail every year, about three months before his or her birthday. (If you're not getting it, call the Social Security Administration at 800 772 1213.)
Among other things, this document shows your complete earnings record as it appears in the Social Security Administration's computer. Check it for accuracy -- mistakes do happen. (And don't worry -- if there are any mistakes, you can correct them.)
The four-page document tells you:
what you can expect as a monthly retirement benefit, if you stop working at age 62, at your full retirement age (which is 66 for people born between 1943 and 1954), or at 70.
what you'd get now as a monthly disability benefit, if you were severely disabled; and
what your family would receive in survivor benefits, if you died this year.
If you have questions about the benefits you're entitled to, go to www.ssa.gov, where you'll find comprehensive information about the rules. You can also call the Social Security Administration at 800-772-1213 and speak to an agency representative.
If you're almost old enough to qualify for a retirement benefit -- which is age 62 if you're single, married, or divorced -- make an appointment to discuss your options with a Social Security representative at one of their field offices. The agency's goal is to get you the maximum benefit for which you qualify. The vast majority of Social Security representatives are courteous, patient, and helpful.
Okay, here are the basic rules for married couples and divorced singles. (We'll get to the rules for widows, widowers and other survivors next week):
1. If you're married, you can claim a benefit based on your spouse's work record, or a benefit based on your own record.
If you're divorced, were married at least ten years, and haven't remarried, you can claim a benefit based on your ex-spouse's work record, or a benefit based on your own record.
But in either case, you get the larger of the two amounts -- your own benefit or your spousal benefit -- not both.
Your maximum spousal benefit is 50% of the amount your husband or wife -- or ex-husband or ex-wife -- is entitled to. If Joe's benefit is $1,000 a month, Jane's maximum spousal benefit is $500 a month. (And vice versa. All the rules apply to both men and women.)
2. If you're married, you cannot apply for a benefit based on your spouse's record until he or she has actually filed for Social Security.
If you're divorced and you qualify for a spousal benefit, you can apply for it as soon as your ex is eligible for a benefit, even if he or she hasn't yet filed for it.
But in either case, you can't apply for a benefit until you're at least 62 years old.
3. No matter whose record it's based on, the amount you get depends on your own age when you apply for it. If you're under your full retirement age (FRA), you get less; if you delay past your FRA, you get more. The difference can be substantial. If your FRA is 66, but you file for your own benefit at 62, for example, your check is 25% smaller than if you'd waited. (There are also discounts for spousal benefits claimed when you're under your FRA.)
But if you file after your FRA, you get an extra 8% a year for up to four years of delay. (These 8% credits apply only to your own benefit, not to spousal benefits.)
In other words, if you wait until you're 70 to apply for your benefit, your monthly check is 76% bigger than if you apply at age 62; and the increase is even greater when you include annual cost of living adjustments. This can make a huge difference to your spouse as well as to you, because he or she gets a 100% survivor's benefit after your death.
Even so, delaying the application for Social Security isn't the best choice for everybody. (For more about that, see Does It Really Pay To Postpone Taking Social Security?)
My next post will discuss some of the less well-known rules that are the subject of my AARP Magazine article. I'll also address specific questions from readers.
(c) Lynn Brenner, All Rights Reserved
But let's begin with some general advice for everybody:
Your first step should be to read your Social Security personal benefits estimate. This is a four-page document that every worker over age 25 receives in the mail every year, about three months before his or her birthday. (If you're not getting it, call the Social Security Administration at 800 772 1213.)
Among other things, this document shows your complete earnings record as it appears in the Social Security Administration's computer. Check it for accuracy -- mistakes do happen. (And don't worry -- if there are any mistakes, you can correct them.)
The four-page document tells you:
what you can expect as a monthly retirement benefit, if you stop working at age 62, at your full retirement age (which is 66 for people born between 1943 and 1954), or at 70.
what you'd get now as a monthly disability benefit, if you were severely disabled; and
what your family would receive in survivor benefits, if you died this year.
If you have questions about the benefits you're entitled to, go to www.ssa.gov, where you'll find comprehensive information about the rules. You can also call the Social Security Administration at 800-772-1213 and speak to an agency representative.
If you're almost old enough to qualify for a retirement benefit -- which is age 62 if you're single, married, or divorced -- make an appointment to discuss your options with a Social Security representative at one of their field offices. The agency's goal is to get you the maximum benefit for which you qualify. The vast majority of Social Security representatives are courteous, patient, and helpful.
Okay, here are the basic rules for married couples and divorced singles. (We'll get to the rules for widows, widowers and other survivors next week):
1. If you're married, you can claim a benefit based on your spouse's work record, or a benefit based on your own record.
If you're divorced, were married at least ten years, and haven't remarried, you can claim a benefit based on your ex-spouse's work record, or a benefit based on your own record.
But in either case, you get the larger of the two amounts -- your own benefit or your spousal benefit -- not both.
Your maximum spousal benefit is 50% of the amount your husband or wife -- or ex-husband or ex-wife -- is entitled to. If Joe's benefit is $1,000 a month, Jane's maximum spousal benefit is $500 a month. (And vice versa. All the rules apply to both men and women.)
2. If you're married, you cannot apply for a benefit based on your spouse's record until he or she has actually filed for Social Security.
If you're divorced and you qualify for a spousal benefit, you can apply for it as soon as your ex is eligible for a benefit, even if he or she hasn't yet filed for it.
But in either case, you can't apply for a benefit until you're at least 62 years old.
3. No matter whose record it's based on, the amount you get depends on your own age when you apply for it. If you're under your full retirement age (FRA), you get less; if you delay past your FRA, you get more. The difference can be substantial. If your FRA is 66, but you file for your own benefit at 62, for example, your check is 25% smaller than if you'd waited. (There are also discounts for spousal benefits claimed when you're under your FRA.)
But if you file after your FRA, you get an extra 8% a year for up to four years of delay. (These 8% credits apply only to your own benefit, not to spousal benefits.)
In other words, if you wait until you're 70 to apply for your benefit, your monthly check is 76% bigger than if you apply at age 62; and the increase is even greater when you include annual cost of living adjustments. This can make a huge difference to your spouse as well as to you, because he or she gets a 100% survivor's benefit after your death.
Even so, delaying the application for Social Security isn't the best choice for everybody. (For more about that, see Does It Really Pay To Postpone Taking Social Security?)
My next post will discuss some of the less well-known rules that are the subject of my AARP Magazine article. I'll also address specific questions from readers.
(c) Lynn Brenner, All Rights Reserved
September/ October 2009 AARP: your article
http://www.ssa.gov/oact/anypia/anypia.html as listed in a recent article your published in AARP does not link. Please advise your readers on the correct link to the page.
Robert
Posted by: Robert Lafayette | 08/31/2009 at 08:17 AM
Lynn replies: Thanks for alerting me to this. The correct link to the Social Security online calculator is: http://www.socialsecurity.gov/OACT/anypia/anypia.html
We've also corrected it in the online version of the article.
Posted by: Lynn Brenner | 08/31/2009 at 08:42 AM
I read your recent article in AARP about Social Security benefits that go unclaimed every year.
I was married for 10+ years, am divorced and unmarried and got very excited when I read your article, only to find out that you cannot make more than $14,000/year in order to collect those benefits. This was not mentioned at all in the whole article and I wondered why and if the $14,000 number was correct.
Please advise, thanks!
Pat
Posted by: pat strusinski | 09/06/2009 at 09:01 AM
Lynn replies:
When you are under FRA and collect Social Security, you lose $1 of benefit for each $2 you earn over an annual amount. In 2009, the annual earnings cap is $14,160. It is not true that if you make this amount, you can't collect a benefit. What is true is that if you make more than this amount, you forfeit some of your benefit. If you made $30,000, for example, you would be earning $15,840 above the limit, and would forfeit $7,920 of your annual benefit.
My article in AARP Magazine described options available to people who have reached FRA, to whom the annual earnings cap does not apply. There are no restrictions on the amount you can earn once you've reached full retirement age.
Posted by: lynn brenner | 09/06/2009 at 11:56 AM
After reading your article in AARP, I called my friend to tell her that she could collect on her ex-husband's social security even though he is not collecting his yet. He is 62 and she is 65. She went to our local SS office and they told her she cannot get this until he files for his own. Who is right and what should she try now?
Posted by: kim hunt | 09/10/2009 at 04:21 PM
Lynn replies:
Your friend was misinformed! You should urge her to go to the Social Security Administration's website, at http://www.ssa.gov/retire2/yourdivspouse.htm, print out the rules, and take a copy back to the local SS office to show to the staff there.
What they told her is true only for married couples. When you are divorced and eligible for a spousal benefit, you can file for it it as soon as your ex qualifies for a benefit, whether or not he has filed for it. Your friend will find this rule in black and white at the above url.
Posted by: lynn brenner | 09/10/2009 at 04:52 PM