Turning 66 This Year? Last Chance Social Security Opportunity Still Exists!
Looking for a little extra income for four years? Born on or before Jan 1, 1954? Then you may be in luck.
Background: Those who reach their full retirement age of 66 in 2019 are the last group of Americans eligible to file a restricted claim for spousal benefits, which allows their own retirement benefit to continue to grow by 8% per year up to age 70, while receiving 50% of their spouse’s benefit (assuming your spouse is already receiving social security).
Example: Jack, age 66 this year, is married to Jill, who is already receiving social security of $1,500 per month. If Jack starts collecting his social security this year, he would be eligible for $2,200 per month. However, Jack can delay receiving his benefit and file a restricted application to claim a $750 monthly spousal benefit (50% of Jill’s $1,500 benefit) bringing their combined monthly benefit up to $2,250. While Jack’s benefit is delayed, it continues to grow at 8%, increasing to approximately $2,900 at age 70. At that point, the combined social security is increased to $4,400 per month. And it gets better! Jack’s increased benefit is one that Jill can keep should Jack predecease her, increasing her monthly benefit at Jack’s death by $1,400 ($2900 - $1500 she was receiving).
- As stated above, in order to take advantage of this strategy, your spouse must already be claiming his or her benefit. So if your spouse is 60, you would have to wait at least two years before you could use this strategy.
- The strategy works best if the lower earner claims first and the higher earner files a restricted claim allowing their benefit to continue to grow.
- Divorced? You are still entitled to this strategy as long as you were married for at least ten years, divorced for at least two years, and currently single. Even better… your ex-spouse does not have to be receiving social security to qualify.
- Eligible individuals do not have to use this strategy in 2019. (You must just be age-eligible this year.) You can use this strategy anytime between ages 66 and 70.
Bottom Line: If you reach age 66 this year, you may want to consider this valuable claiming strategy. As always, if you’re not sure what to do, we can certainly assist you with crunching the numbers. Please give us a call.
Pinnacle Wealth Management Group, Inc.
Securities offered through Private Client Services, Member FINRA/SIPC. Advisory products and services offered through Pinnacle Wealth Management Group, Inc., a Registered Investment Advisor. Private Client Services and Pinnacle Wealth Management Group, Inc., are unaffiliated entities.