Many older Americans are leaving substantial Social Security benefits unclaimed, costing them tens of thousands over their retirement. Unlock potential monthly checks today!
Delayed Retirement Credits
Many boomers initiate their Social Security benefits at 62, but few realize the substantial advantages of delaying their claims. By postponing benefits until age 70, individuals can receive an approximately 8% increase in their monthly check for each year beyond their full retirement age. Over a 20-year retirement span, this could mean an additional $100,000 in your pocket!
This automatic boost from delayed retirement credits cannot be recaptured if you claim early. Weigh your health and work situation before deciding to collect early; delaying benefits might be your smartest financial move.
Spousal Benefits
Many retirees overlook the option of spousal benefits, which can significantly augment their monthly checks. Even if you didn't work or earned less than your spouse, as a married individual or a divorced spouse (marriage lasting at least 10 years), you could be eligible to claim up to 50% of your partner's benefit amount.
Spousal benefits can be a game-changer, especially for those who have a lower earnings history. Failing to claim spousal benefits could curtail your retirement income, forcing you to depend only on your smaller benefit amount.
Survivor Benefits
Survivor benefits are another essential area often overlooked. Widows and widowers can opt to collect based on their deceased spouse's earnings. This could lead to a larger monthly benefit compared to what they might receive based on their own work record.
These benefits often go unclaimed, particularly if a widow or widower remarries. The Social Security Administration (SSA) does not always provide updates on available options, making it essential for individuals to conduct their research or inquire about these survivor benefits directly.
Divorced Spouse Benefits
In cases of divorce, individuals can still reap the rewards of their ex-spouse's Social Security benefits. If you were married for at least 10 years, are currently unmarried, and aged 62 or older, you qualify for benefits based on your ex-spouse's earnings without affecting their payments.
This opportunity is frequently passed over due to personal feelings about the divorce. However, claiming these benefits can significantly enhance your financial situation during retirement, making it a crucial aspect not to ignore.
Child and Dependent Benefits
Retirees with dependent children or disabled adult children may not know their dependents can benefit from your work record as well. If you're raising a legally adopted grandchild, they might also be eligible for benefits.
Social Security isn't limited to retirement; it offers valuable support to families with dependents. Not being aware of these options could lead to missing out on money rightfully owed.
Tax Optimization Opportunities
Many retirees are unaware that their Social Security benefits can be subject to taxation based on their overall income. With careful tax planning, it’s possible to reduce or eliminate taxes on these benefits.
Consulting with a financial advisor can help you draw strategically from IRAs or Roth accounts, lowering your provisional income while preserving more of your Social Security benefit. The SSA does not directly provide this advice, making professional guidance crucial.
Do-Over Option (Withdrawal and Refiling)
If you've started receiving Social Security benefits early and now regret that choice, you have a hidden do-over option! The SSA allows you to withdraw your application within 12 months of starting benefits, pay back what you've received, and reapply later for a higher benefit amount.
This powerful option is often unknown. If your financial situation changes or you discover a healthier opportunity to delay claiming benefits, take advantage of this before the 12-month window closes.
Final Thoughts
The Social Security system is intricate, and the choices made regarding benefits can have a lasting impact on your financial health. Countless boomers miss out on substantial earnings simply because they are uninformed about their entitlements. A deep dive into your options, or a discussion with a financial expert, may unveil benefits that can drastically improve your financial security in retirement.
Reassess your Social Security strategies today. Are you leaving money on the table by not exploring these benefits? Don't wait until it's too late; take action and empower your financial future.