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Social Security: Proper Planning Is Crucial

Proper Social Security Planning is an Essential Part of Financial Planning as a Whole

Proper Social Security Planning is an Essential Part of Financial Planning as a Whole

Recent changes may call for taking another look at your strategy. More and more Americans are buying second homes—the kind on wheels, that is. The RV market has enjoyed strong growth since the recession, thanks to low fuel prices, low interest rates, and 10,000 retirement-minded baby boomers turning 65 each day. If you’re on a roll to retirement—whether in the comfort of a massage-enhanced RV recliner or not—consider pulling over and checking your Social Security claiming strategy. With major changes to Social Security in 2016, a tune-up may be needed. The two most significant changes apply to “restricted applications” and the “file and suspend” tactic. 

Anyone who was 61 or younger by the end of 2015 is no longer eligible for these claiming strategies:

 ➣ A restricted application allowed you to claim benefits from a spouse—usually between full retirement age and age 70—and delay your own retirement benefit until age 70 in order to earn delayed retirement credits of 8% a year. This is no longer an option for those born after 1953.
 ➣ The file and suspend strategy enabled you to earn delayed retirement credits of 8% a year until age 70 while any beneficiaries could claim benefits, such as spousal benefits. Now, family members may no longer receive benefits based on the earnings of those with suspended benefits.

The elimination of these two claiming strategies, however, doesn’t minimize the importance of deciding when to take Social Security. If you’re in good health, delaying Social Security will increase monthly benefits that will rise with inflation and last the rest of your life. Indeed, the changes mean that longevity and spousal income differences become increasingly important. For many couples, delaying the benefit for the higher earner can have a significant impact: the survivor can claim the late spouse’s full benefit. With a 50% probability that one spouse of a couple who are both 65 will live to age 90, guaranteed, annuity-style income is an efficient way to handle this risk. Moreover, other effective claiming strategies remain unchanged. It may be in your best interest to meet for a Social Security “tune-up” and discuss strategies designed to optimize your benefits. 
If the potential risk of falling prey to common Social Security claiming mistakes has you concerned about your ability to maintain your financial freedom and stay on a roll to retirement, ask yourself:
 1:  Does my current claiming strategy reflect my personal goals and objectives?

 2:  Is this important enough to investigate my options?

 3:  Am I willing to accept help in this endeavor?
If this issue is important to you, it is important to me. Let’s sit down and talk.

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