Retirement Tips You Can't Miss: Social Security Strategies

Transcript

Hello, and welcome to Fisher Investments' Retirement Tips You Can't Miss. A series designed to help you enjoy the comfortable retirement you've worked so hard for, without worrying about how to make your money last. Today, we're going to talk about one of the most important decisions you'll make in retirement when to claim your Social Security benefits. Let's dive in. Deciding when to claim Social Security benefits can have a significant impact on your retirement income. Every retiree has a full retirement age, or FRA, set by the Social Security Administration, which is typically between 66 and 67, depending on the year you were born. Your FRA determines when you can start collecting the full benefit amount that you're eligible for, based on your earned income during your working years. Now, while you can start receiving Social Security as early as age 62, waiting to claim benefits until your full retirement age, or even delaying until age 70, may help you maximize your benefit. For each year you delay claiming your Social Security benefits past your FRA, your benefit will grow by about 8% annually, and that can make a big difference over time, especially if you expect to live a long life. While we know waiting until your full retirement age or later can help in terms of how much Social Security income you'll receive throughout retirement, your personal circumstances should ultimately drive the decision of when to start claiming. So, when's the right time for you? Many retirees have to strike a balance between taking benefits earlier versus later. So, let's explore a few common scenarios to help you decide. If you have immediate income needs or health concerns, claiming early may make sense. Just remember, if you claim early, your monthly benefit will be reduced for life. On the other hand, waiting until your full retirement age means you'll receive your full benefit without any reduction. If you can afford to wait further, delaying Social Security until age 70 will give you the highest possible monthly payout. This strategy is ideal if longevity runs in your family or if you're in good health. It's important to note though, there is no further benefit increase after 70 years old. So, that's the absolute latest age you should begin drawing on your Social Security. But what if you're married, divorced, or widowed? In those cases, you may be eligible for what's known as spousal or survivor benefits. Now, here are a few examples to consider. If you've been married for at least one year and your spouse's benefit is less than half of your FRA amount, your spouse may actually qualify for spousal payment. This spousal payment would increase their Social Security income permanently, up to a maximum of 50% of your full retirement age benefit. Your spouse can start collecting this as early as age 62, though they would need to wait until 67 years old to receive the maximum amount. To unlock this spousal payment, you must file for your own retirement benefit first. If you're divorced, you may also still be eligible for spousal payment. To qualify, you must have been married for at least ten years, divorced for at least two years, and not remarried. If you meet these requirements. You can receive up to 50% of your ex-spouse's FRA benefit. Now, like standard spousal benefits, you can start collecting as early as age 62, though the full benefit is available at age 67. Unlike the regular spousal benefit, your ex-spouse doesn't need to file for their retirement benefit first. However, they must be at least 62 years old. Lastly, if you're widowed, you may be eligible for a survivor benefit, which can be as much as 100% of the amount your spouse was eligible for at their full retirement age. You can start receiving a survivor benefit as early as age 60 or age 50 if you're living with a disability. If your spouse was delaying their Social Security beyond their FRA, this means your survivor benefit will include all of their delayed growth that they would have received up until the month they passed away. Now, back to the big question when should you start collecting Social Security? Well, unfortunately, the answer is it depends. There is no simple one size fits all approach to Social Security benefits. While we've covered the basics in a few common scenarios, everyone's situation is unique. The best strategy for you will depend on your goals, health, and financial picture. As always, you may want to consult your financial professional to help you decide which approach to claiming your Social Security interest is best for you. For more resources and insights, please visit FisherInvestments.com. Thanks for watching and don't forget to "Like" and "Subscribe!"