Social Security

In 2016, nearly 90% of Americans age 65 or older received Social Security benefits. This represented about 33% of their income.1 Yet, there is still confusion about how to maximize Social Security benefits to increase income throughout one’s lifetime.  As a result, nearly half of recipients claim as early as possible,2 and very few people begin the process of claiming Social Security with any sort of plan.  You may want to review your personal financial situation with both your financial advisor and tax advisor to determine the best options available to you when claiming Social Security benefits.

Plan ahead for best results

Social Security is a vital source of guaranteed income in retirement. Unless you have a defined benefit pension through work or have purchased an annuity, this type of steady, monthly cash is not easy to come by. Many of the risks that concern retirement investors are not at play with Social Security income. The benefits are backed by the U.S. government and not impacted by market moves. There is no risk of outliving these benefits, and your surviving spouse can continue to receive lifetime benefits after you are gone, regardless of whether he or she worked and contributed to Social Security. Most importantly, regular cost of living adjustments help your benefits keep pace with inflation.
Having a strategy can add tens of thousands of dollars to your guaranteed monthly lifetime income. Married couples, in particular, should pay attention to the timing of each spouse’s claim, and take advantage of spousal as well as individual benefits as a way to maximize income. That’s why a Social Security strategy should be a part of your retirement income plan.

Claim now or wait?

Choosing when to claim is an individual decision, and there are certain circumstances under which it makes more sense to claim early. For example, you may have health issues that shorten your life expectancy and make it necessary to claim as early as possible. Parents of disabled children may claim early so as to get benefits for a child. Or you may simply want to get your hands on the money as soon as possible.
Claiming Strategy Basics

Benefits for the divorced or widowed

If you are divorced or widowed and the marriage lasted at least 10 years, then you may have the opportunity to claim benefits on an ex-spouse’s record. Even in cases where the divorced ex has remarried, you can receive benefits on his or her record as long as you are unmarried, age 62 or older, and the benefit you are entitled to receive through Social Security is less than the one you can receive through your own record. Claim at your full retirement age and the benefit will be equal to one half of your former spouse’s retirement benefit amount. Divorced benefits do not include any delayed retirement credits that your ex-spouse may have received. The amount of benefits your divorced spouse receives has no effect on the amount you and/or your current spouse receives.3
Surviving spouses are also entitled to receive benefits on a former spouse’s record. You can claim as early as age 60 for reduced benefits or receive full benefits at full retirement age. If you remarry after age 60, there is no impact on survivor benefit eligibility.4 Children younger than 18 or who have a disability should also qualify to receive survivor benefits.5

Consider these next steps

  • Go to and review your Social Security statement.
    You can sign up here at my Social Security account to keep track of and review the accuracy of annual earnings, get an estimate of future benefits and manage benefits when you start receiving them.
  • Plan ahead and do a benefit analysis of the best time for you and/or your spouse to claim Social Security.
    The best time to claim is likely different for each individual.
  • Make Social Security income a part of your retirement income plan.
    Once you have a sense of the guaranteed monthly benefits you will receive through Social Security, you can build them into a retirement income floor that you can use to cover essential expenses.  Learn how any gaps in guaranteed income can be filled by purchasing a fixed annuity, one of the few sources of guaranteed income beyond Social Security.  Annuities are designed for retirement savings or for other long-term goals. They offer several payment options, including lifetime income. Guarantees are based on the claims-paying ability of the issuer.
Next Steps

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1 Social Security Basic Facts. June 2018.
2 Incentivizing Delayed Claiming of Social Security Retirement Benefits Before Reaching the Full Retirement Age. Social Security Bulletin Vol. 74 No.4, 2014.
3 Retirement Planner: Benefits For Your Divorced Spouse. 03/04/19.
4 Survivors Planner: Survivors Benefits For Your Widow Or Widower. 03/04/19.
5 Survivors Planner: Survivors Benefits For Your Children. 03/04/19.
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