Social Security Benefits – A Q & A

By no means is this article covering all of the intricate complexities of how to make the most of social security, however it does answer some keys points that can be helpful to know.

What is “Full Retirement Age”?

Relative to social security, it is the age at which a person may first become entitled to non-retirement credits”.  For each year a person waits past full retirement age to reduced, full retirement benefits.  Depending on your year of birth that is age 65 to 67. Sounds simple but it is misleading.  A person’s largest benefit is available at age 70 due to “delayed collect benefits up to age 70 that person’s monthly benefit increases by 8%.

Does it make sense to claim reduced benefits at age 62 and invest the money instead of waiting to collect benefits at full retirement age or later?

This depends on your particular situation and how big a risk you are willing to take.  The risk is whether you will get a better return on your money through investing it than you will get from social security increases that come with waiting to claim a benefit.  Remember, your return is 8% per each year a person waits beyond full retirement age to collect benefits and that is not subject to fluxuations like investments are.  A side note, if you think social security is going to run out of money to make good on your benefits then you might also decide to take the reduced benefit amount at age 62.

Does my benefit increase if I wait to collect it past the age of 70?

The maximum benefit you can collect is reached at age 70.  Therefore waiting to collect benefits beyond age 70 does not increase your benefit.

What are some key things about social security a divorced person might want to know?

A divorced person can receive benefits based on their ex-spouse’s record or benefit amount.  Certain criteria must be met in order to collect those benefits including: The marriage to a particular ex-spouse must have lasted at least 10 years, the person collecting benefits based on their ex-spouse’s benefit must be unmarried and age 62 or older unless the ex-spouse is deceased, then the age is 60.  There are many more details a divorced person should understand about receiving a benefit based on an ex-spouse’s record however, divorced spouses typically have a lot of flexibility when it comes to claiming a benefit.

What are survivor benefits?

A surviving spouse is eligible to receive 100% of the deceased spouse’s basic benefit if the surviving spouse waits until full retirement age to claim a survivor’s benefit.  There are many financially smart ways to claim social security benefits as a surviving spouse and it is worthwhile to contact a professional who can help you navigate all of the options.  One example is that a widower could take a reduced benefit based on his own earnings record at age 62 and switch to a full survivor benefit at his full retirement age or vice versa.

Where does a person get help understanding the ins and outs of social security?

First, go to the social security administration’s website.  If you do not have a computer you can find one at a local library to use.  These days there are more and more online services that can provide help.  Some of these services are free and some are not.  There are also several books you can consult.  You can hire an advisor or consultant who understands social security to walk you through various scenarios for your particular situation.
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Karen helps attorneys; mediators, individuals and couples, navigate through the financial morass of divorce and widowhood. Her expertise lies in understanding the special tax and financial issues that can plague divorce and she helps clients get their financial fair share and equitable settlements. She provides financial analysis, projections and solutions so clients can avoid long-term regret over decisions made early on in divorce and widowhood.  Karen offers a range of financial, investment and insurance services that address clients’ complete financial picture and long-term needs before, during and after marriage.  She is currently writing a book entitled, “To Have and To Hold Onto Your Financial Fair Share: Financial Decision Making When Marriage Ends in Divorce or Death.”