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Social Security Strategies

Deciding when to take Social Security benefits is an important financial decision for retirees. While many take benefits as soon as they are eligible, delaying benefits may result in receiving additional income overall. The following discusses one of several strategies for maximizing Social Security benefits.

The Social Security Administration offers three types of benefits for retirees and their spouses:

Retirement Worker Benefit-- Basic benefit determined by work history

Spousal Benefit-- Benefit ( up to 50% if spouse has reached full retirement age ( FRA ) provided to retirees spouses once they have claimed their own benefit.

Survivior Benefit-- Benefit provided to surviving spouse

Workers who claim benefits prior to reaching FRA will receive a redused benefit of up to 25% of the primary insurance amount. Delaying a claim until age 70 results in a larger benefit of up to 32% more than the primary insurance amount due to the cost-of-living adjustments and delayed retirement credits.

File and Suspend

Different strategies for taking benefits can help maximize the amount individuals receive over their lifetimes

The "File and Suspend strategy" is one such strategy that married couples can employ that may provide them with additional Social Security benefits.

The " File & Suspend strategy potentionally allows for:

The higher-earning spouse to delay benefits and receive up to 32% more than the primary insurance amount

The lower earning spouse to receive the spousal benefit before the higher earning spouse begins taking claims.

The lower earning spouse to receive a larger survivor benefit,

The reduction of RMD's by taking withdrawals from IRA's when needed prior to claiming benefits at age 70, potentially keeping more Social Security benefits tax free.

This strategy works best for couples in good health where the husband is older than his spouse and is the higher income earner. If one of the spouses is in poor health or there is an immediate need for income, benefits should not be delayed. Alternatively, if there is a need to preserve the IRA becasue valuations are down and withdrawals should be delayed, Social Security benefits could be taken early.

Let us assist you in determining which strategy best suits your personal financial situation and call us today for a personal analysis and options available that can potentially increase your benefit.