Fixing a Mistake in Social Security Retirement Benefits
Last year in 2011 there was a large window of opportunity to fix a claimed benefit for up to 9 years! That window is now shut down in 2012 and limited to fixing, revoking or changing your retirement claims at Social Security. Now, only during the first 12 months following the time you claim Social Security retirement benefits can you fix or reset your benefits. Form 521 found on the ssa.gov site is where you would find the form and the details for filing these benefits.
Here's a question that was raised this week: "If I first claimed my Social Security benefits at age 62, and I'm now age 66 and working at new job, what can I expect or do about what has already been done?"
Full Retirement Age (FRA) is currently age 66 for those thinking about filing benefits. There is an option to "Suspend" payments at age 66 currently, and then receive 8% increase each year you delay claiming your benefits for each of the next 4 years through age 70. For example, if you're age 66 and already receiving benefits, then you could stop receiving Social Security payments and lock in an 8% increase in benefits per year up to age 70 maximum, or receive a total of 32% more total benefits for the rest of your life. If you believe your life expectancy age to be low, this would not make sense of course. However if you believe your life expectancy age is higher than average given your family history and/or the status of your current health, you should seek advice and consider this option. If you were eligible to receive, say, a $1,000 of monthly Social Security benefits beginning at age 66, and then suspend receiving those benefits for the next 4 years through age 70, this would then increase your benefits to $1,320/month (or $320 more per month), which would be a 32% increase in benefit dollars annualized than if you began collecting your retirement benefits at age 66.
If you are married, and either you or your spouse has not yet filed, then perhaps focusing on maximizing your collective Social Security retirement benefits would be your best option so neither of you leave money on the table. We have a calculator on our website which allows you and/or your advisors to calculate the benefits of working through these 9 Social Security strategies, with specific emphasis on the 2 major switch strategies. When you click on this calculator link here, or on the right side of the home page of Stewardship Matters (see website link address below and click on "Social Security Timing"), select "no thanks" for help and click on what is at stake at the end of your inputs to see that ... "it does really matter!"
We also have some other articles posted on our website that you may wish to check out as well. Come visit us @ our website: www.stewardshipmatters.net.
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