Massachusetts Estate Planning & Asset Protection Blog

You Can Maximize (and Minimize) Your Social Security Benefits

Posted by Dennis Sullivan & Associates on Tue, Jul 26, 2011

One of the most important decisions seniors face is when to take Social Security.  According to experts, it's best to delay collecting until age 70, if possible, at whic time one would receive the greatest monthly benefit.  According to Jason Fichtner, a senior research fellow at the Mercatus Center at George Mason University, "Far too often people choose to begin Social Security retirement benefits at age 62, not realizing that there's a 6% reduction in benefits for each year below the full retirement age."

With full retirement age now at age 66, Fichtner said that to take benefits at age 62 would result in a 30% reduction in monthly benefits. "If that same person waited until age 70 to begin benefits, the monthly payment would be 76% higher than that age 62 initial benefit and 32% higher than initial benefit if they claimed at age 66," he said.

To help people decide when might be the best time for them to claim these benefits, there are online calculators, some of which are free, including one by AARP.

These online calculators help people to make an informed decision according to their particular circumstances.  The calculator asks a series of questions to the user and provides estimates for both monthly and lifetime benefits across different ages. It also allows users to customize their use by calculating spousal benefits and the impact continuing to work might have while collecting benefits.  It also allows users to compare estimated monthly benefits to expected expenses in retirement and print a personalized summary report.

Another piece of the puzzle it includes is that it also asks whether you are married or divorced and advises users of some unknown claiming strategies like the file-and-suspend or claim-now-claim-more-later strategies for married people.  It also includes divorced-spouse benefit strategy.

Although no online calculator is perfect, the AARP calculator is simple and quite user friendly and does give good information.  Other available free tools are found at the following sites:

* The Social Security Administration's website


* The Social Security Claiming Guide, offered by the Center for Retirement Research at Boston College

Fee-based tools are available at the following sites:

* Social Security Solutions.

* Maximize My Social Security

To learn firsthand how to make the most of your retirement earnings and how to protect them and all your other assets from taxes, probate, and increasing medical and nursing home costs, register online for one of our Trust, Estate & Asset Protection workshops or call 800-964-4295.



Tags: Retirement, social security, file-and-suspend, online calculator

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