Three Essential Things To Do Before You File Social SecuritySubmitted by Helping Families Build A Financial Legacy on May 3rd, 2018
As you plan for your financial future and retirement, it is important that you understand Social Security so you can get the most out of your benefits. Social Security is an integral part of most retirement plans and for many it is the primary source of income in retirement. It can also provide benefits in the event of disability or survivor benefits to your dependents. Though it may seem tempting to take Social Security as soon as you are eligible, you may not get the maximum benefit if you enroll right away.
Before you decide to enroll in Social Security make sure to do these three things in order to maximize benefits for you and your spouse.
1) Review Your Social Security Statement
Your Social Security Statement has your full retirement age and summarizes your retirement, disability, and survivor benefits. Your social security benefits are based on the highest 35 years of adjusted wages, so it is important to make sure your record is correct. The Social Security Administration stopped mailing paper statements to most American workers under 60 years old, so you should set a reminder to review each year.
2) Make an Appointment With Your Local Social Security Office
Your local Social Security office is the best place to get answers regarding your social security benefits. I encourage clients to make an appointment with the local Social Security office prior to enrolling in order to receive information about their benefits and get official answers to their questions. It is a good idea to bring along a friend or your financial advisor to take notes.
3) Compare the Cumulative Benefits
Now that you know your benefits, you will need to compare the cumulative benefits in different scenarios for both spouses. Four of the possibilities to consider are: a) early retirement b) collecting at full retirement age c) death of either spouse and d) delayed retirement to age 70. You will want to look at your monthly or annual payments and the lifetime amount you will receive based on different life expectancy estimates. You can use this information to determine your “break even” points, or the age at which one choice is more beneficial than another.
Once you have completed these steps, it is time to decide. If you want help evaluating your options, make sure to consult your financial advisor. As a financial advisor, I can help you understand your options and the impact each option would have on your overall financial well-being.