Your Financial Future / Call To Action- SS Claiming Options Change On May 1st

By Roxanne E. Fleszar

Clients from Massachusetts came into my Key West office yesterday; they make a point of visiting the Keys every year. Social Security (SS) was on their mind as she is approaching age 66. So what claiming strategy will work best for their circumstances?

As you may know, two popular claiming strategies for married couples are about to expire in a month. The first is called file and suspend; the higher earner in a couple can file for their own benefit at age 66, the full retirement age for those born between 1943 and 1954. Then ask SS to suspend it. They will earn delayed retirement credits until they begin to collect benefits. The benefit will rise between 6% and 8% until they reach age 70, and that higher benefit will be eligible to be indexed to inflation for life…a great benefit. If you can afford to wait, the increased benefit sure beats comparable conservative earnings elsewhere today. Your spouse can collect spousal benefits as long as they are age 62. The spousal benefit is 50% of yours and will be less if your spouse is less than age 66.

The second strategy is called restricting an application. The higher wage earner has reached full retirement age and wants to delay their benefit to accrue the credits mentioned above. The lower earning spouse claims their benefit first, then the higher earner files for benefits based on the lower spouse’s earnings. The higher earner collects 50% of the spouse’s full retirement benefit even if they are not yet age 66. The higher earner can change to their now greater benefit at age 70, or earlier. The spouse can switch to a spousal benefit based upon the higher earners benefit at age 66.

These strategies became popular as they do dramatically increase long-term lifetime SS benefits. So if, you are thinking they may benefit you, act now! See your financial advisor or meet with a SS representative immediately as they expire on May 1st.

Roxanne E. Fleszar, CFP, ChFC is President of Financial Resources Management Corp, a registered investment advisory firm with offices in Key West, Boston and Naples.

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