If you want to spend more money in retirement you’ll want to understand how to maximize your Social Security benefits. Many people think that there is no going back once you’ve decided to collect your Social Security benefits. However, today’s retirement headline discusses two options in case you’d like a do-over.
In our listener question segment, one listener asks the best way to pass on their assets to their children. Listen in to hear the answer and scroll to the bottom of the show notes to discover more estate planning resources.
Outline of This Episode
- [2:02] What happens if you change your mind about collecting Social Security?
- [7:01] When exactly should you start Social Security?
- [10:50] The best way to pass assets onto your kids
Sometimes in life, we just want a do-over
Have you ever made a major life decision and wish you could take a mulligan (a golf term for a do-over)?
If you feel like you claimed your Social Security benefit at the wrong time, you may wish you could have another chance to get it right. Good news–it may not be too late.
One of the authors of this Financial Advisor Magazine article is Jeremy Keil, a friend of mine and host of the Retirement Revealed podcast. This article discusses two strategies to maximize Social Security benefits for his clients, including the lesser-known Social Security do-overs.
Maximize your Social Security by waiting until age 70
If you’ve listened to this show before you probably know that one of the simplest ways to maximize your Social Security benefits is to delay filing.
Some people are in a rush to claim Social Security benefits and they do so at age 62 since this is the earliest time that one could do so.
Full retirement age is now at age 67 and age 70 is when the monthly benefit reaches its maximum.
How you could get a mulligan for your Social Security decision
If you’re just hearing this news for the first time and have already claimed your benefit, you can still potentially increase your benefits through a suspension or withdrawal, which can lead to up to an 8% annual increase in benefits.
To qualify, certain conditions must be met. A suspension of benefits is available to those who filed for early benefits and are now above full retirement age but not yet 70. This option allows for delayed retirement credits of 0.666% each month (or 8% annually), including cost-of-living adjustments. Benefits are stopped the month after the suspension request and can be restarted at any time.
Another way is used for those who have filed for benefits in the past 12 months. If you change your mind then, you can withdraw your application and repay the benefits received. Then reapply later. This could lead to a substantial increase in your monthly benefit–8% annually.
How to know the best time to collect Social Security benefits
Some people want to calculate to the penny when the best time would be to collect Social Security. However, without a crystal ball, no one can say with such exactitude. This is why looking at the overall big picture is more important than trying to be so precise.
If you are still deciding when to take Social Security benefits, hopefully, the information in this episode will allow you to make the best decision. But even if you don’t–at least you’ll have some options for backing out.
Resources & People Mentioned
- The Retirement Podcast Network
- Retirement Revealed podcast
- Financial Advisor Magazine article
- Estate planning episodes 295, 296, 124, 313, 255
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