How can I boost my social security benefits?

When dealing with Social Security, the deciding of retirees when to start collecting benefits is top priority.

According to a recent survey by BMO Retirement Institute, a financial research group, many adult Americans are unaware of how they can boost their Social Security benefits.

Jeremy Kisner, C.F.P., a financial planner and author of, "A Good Financial Adviser Will Tell You," says that about two-thirds of Americans file for Social Security at age 62. This is several years before the cut-off for receiving full benefits, called “full retirement age” (FRA).

Here are tips to boost your social security benefits:

1.       Delay Your Application

Waiting to file until retirement age may boost your lifetime Social Security benefit amount as much as $25,000, if you reach at least 85 years old, based on the BMO report. If you reach 90 or older, it increases up even higher to $61,000.

2.       Filing and Suspending

In a married couple, filing and then suspending the benefits of the highest earner can allow their partner to collect a “spousal benefit”.

This benefit can go up to 50 percent of a spouse’s monthly Social Security benefit, while the spouse with the higher income avoids collecting their benefit and it accumulates delayed retirement credits.

This strategy requires couples to have access to additional savings and investments to supplement their income.

3.       Restricted Application

For couples who need money, but don’t want to cash out both of their policies at the same time, one of them can file for full benefits, while the other uses their spousal benefit to piggyback off their partner’s income.

After that, once the couple who receives the reduced amount reaches 70, they can switch their spousal benefit to a full benefit based on their personal lifetime earnings.

Remember that this only works if the person applying for the spousal benefit has reached their FRA and can obtain a “free spousal” benefit, a circumstances in which a married person and some divorced persons can claim spousal benefits without also being forced by Social Security to claim their own retirement benefits, without impacting their own personal Social Security benefit.

These are common tactics used to enhance benefits however, one strategy doesn’t fit all situations or conditions. It’s a good idea to consult a professional to make sound fiscal choices that will save money in the long run.

Making the most out of Social Security will require an individual to read and understand a program’s specifications as well as their own individual situation before making major decisions.

***

Sources:

http://www.agingcare.com/Articles/maximizing-social-security-benefits-154299.htm

http://www.bmo.com/home/personal/banking/investments/retirement-savings/retirement-planning/bmo-wealth-institute/featured

http://www.fpsinsurance.com/essentials/retirement/

http://www.bmo.com/pdf/mf/prospectus/en/BMO%20Retirement%20Institute%20Report%20Q4_E_FINAL.pdf

http://www.completelongtermcare.com/resources/