Social Security Untangled
Having just experienced the indignity of yet another birthday, and being well within the Boomer demographic - maybe not the Greatest Generation, but certainly the most numerous - I am reminded that many of us are wrestling with (or soon will be) how to maximize the payback for all those Social Security payroll deductions we've grumbled about during our working years.
First of all, for all of you who may have envisioned something like a Christmas club account (only a Boomer would remember those) with your name on it somewhere deep within the Treasury Department, that's not how it works. Or at the very least, if there ever was such an account, all your deposits have been withdrawn to pay the Greatest Generation its well-deserved benefits - and now it's the Gen X, Gen Y and Millennials who are carrying most of the funding burden.
If you're already 62, you've likely experienced all the bewildering choices about when to start calling in your Social Security IOUs - and unless there was a pressing need for the funds at that age, I hope you were able to hold your fire. The reason is that your benefits could continue to increase pretty dramatically right up to 70. Even if you could wait until "full retirement age" at 66 (that's what it is for most of us), your monthly check could be 25% greater than at 62; and if you could hold out until 70, your checks would grow a whopping 8% a year after 66. There aren't many other investments these days able to show that kind of guaranteed rate of return. Even if you started early, though, you may be able to salvage the situation by repaying those benefits and kick-starting the accrual process.
There are so many other wrinkles and potential goodies in the system that it's hard to cover more than a couple here. Take this one: If your spouse's own benefit is meager because of a poor earnings record over the years, he or she may be able to claim 50% of your benefit instead. Or this one: Even if you remarry after the death of a spouse, you may still be able to claim a benefit based on the former spouse's earnings record. Now let's say you're single due to divorce: If you were married for at least 10 years, you may still qualify for a benefit based on the former spouse's record, and if the ex dies first, you may be able to claim a survivor's benefit that's the same as what the decedent was receiving - and the same goes even if you've remarried after age 60. You may also be able to put a couple of these options together for yourself: If you're still working and don't want to claim your own benefit now, your spouse may be able to take his or her benefit, so you can claim a spousal benefit - and keep accruing benefits on your own record of earnings. OK, let's flip it: If you're still working past full retirement age (again, that's probably 66), you can apply for your own benefits, but then immediately suspend them, and your spouse can claim a benefit on your record - even so, you can continue to accrue benefits on your own earnings until 70.
And these are just the low-hanging fruit, albeit with many restrictions and limitations necessarily glossed over here. The best way to really understand and evaluate your options is to make an appointment with the Social Security office nearest you and to go in for a thorough consult. You can do a lot online these days, but there's no substitute for a face-to-face conversation on issues as complicated as these. You can reach the Keene office at 877-405-3651; the Manchester office at 866-814-5408; the Nashua office at 877-444-0134; and the Concord office at 888-397-9798.
Posted 06/19/2015 Misc.
First of all, for all of you who may have envisioned something like a Christmas club account (only a Boomer would remember those) with your name on it somewhere deep within the Treasury Department, that's not how it works. Or at the very least, if there ever was such an account, all your deposits have been withdrawn to pay the Greatest Generation its well-deserved benefits - and now it's the Gen X, Gen Y and Millennials who are carrying most of the funding burden.
If you're already 62, you've likely experienced all the bewildering choices about when to start calling in your Social Security IOUs - and unless there was a pressing need for the funds at that age, I hope you were able to hold your fire. The reason is that your benefits could continue to increase pretty dramatically right up to 70. Even if you could wait until "full retirement age" at 66 (that's what it is for most of us), your monthly check could be 25% greater than at 62; and if you could hold out until 70, your checks would grow a whopping 8% a year after 66. There aren't many other investments these days able to show that kind of guaranteed rate of return. Even if you started early, though, you may be able to salvage the situation by repaying those benefits and kick-starting the accrual process.
There are so many other wrinkles and potential goodies in the system that it's hard to cover more than a couple here. Take this one: If your spouse's own benefit is meager because of a poor earnings record over the years, he or she may be able to claim 50% of your benefit instead. Or this one: Even if you remarry after the death of a spouse, you may still be able to claim a benefit based on the former spouse's earnings record. Now let's say you're single due to divorce: If you were married for at least 10 years, you may still qualify for a benefit based on the former spouse's record, and if the ex dies first, you may be able to claim a survivor's benefit that's the same as what the decedent was receiving - and the same goes even if you've remarried after age 60. You may also be able to put a couple of these options together for yourself: If you're still working and don't want to claim your own benefit now, your spouse may be able to take his or her benefit, so you can claim a spousal benefit - and keep accruing benefits on your own record of earnings. OK, let's flip it: If you're still working past full retirement age (again, that's probably 66), you can apply for your own benefits, but then immediately suspend them, and your spouse can claim a benefit on your record - even so, you can continue to accrue benefits on your own earnings until 70.
And these are just the low-hanging fruit, albeit with many restrictions and limitations necessarily glossed over here. The best way to really understand and evaluate your options is to make an appointment with the Social Security office nearest you and to go in for a thorough consult. You can do a lot online these days, but there's no substitute for a face-to-face conversation on issues as complicated as these. You can reach the Keene office at 877-405-3651; the Manchester office at 866-814-5408; the Nashua office at 877-444-0134; and the Concord office at 888-397-9798.
Posted 06/19/2015 Misc.