In our last post, we went through how the Social Security Administration (SSA) arrives at the amount of your Social Security benefits. Now let’s talk about how you make sure are getting the full extent of benefits available to you.
Boston University economics professor Laurence Kotlikoff estimates that Americans leave “about $10 billion in unclaimed spousal benefits on the table each year.” How is that possible?
Usually, married couples only receive the higher of the two benefits, and SSA wipes out the other amount. Instead, Kotlikoff recommended to a friend that his wife file for her benefits then suspend their collection until she turned 70. The husband was able to collect his spousal benefit during that time until he turned 70 and then begin collecting his own thereafter. This way, the benefits grew in those intervening years.
Related to the example above, another way to maximize your Social Security benefits may be to start them before retirement age, and then restart them again later. Called the “start-stop-start” strategy, this can increase your benefits past retirement age because of the delayed retirement credit, through which benefits increase by a certain percentage depending on your date of birth.
Married individuals become eligible for spousal benefits after 10 years of marriage. If you’re approaching 10 years of matrimony and also considering divorce, it may be wise for both you and your soon-to-be-ex-spouse to put off the legal dissolution of the marriage to maximize benefits.
If you are retired and have children under the age of 18 (up to age 19 if they are still in secondary school), they are likely eligible for child benefits.
These are just some of the ways to make sure you’re getting full Social Security benefits. But you have many additional options to consider, depending on other factors. Call us at 501-221-7776 to discuss your situation.