Blue Bell PWM


5 Things You Should Know About Social Security

Alex LaRosa, CFP®

Alex LaRosa, CFP®

Investment Advisor Representative

August 1, 2019

For many retirees, Social Security will be their only source of income during retirement. Because of this we find it critical to educate our clients about the benefits that they are entitled to. Below are 5 facts about Social Security that you may not know:

  1. Divorced Spouses Can Benefit from Their Ex’s Earnings

If you were married for at least 10 years before a divorce, you are still entitled to collect spousal benefits form your ex-spouse. This comes in handy if you Ex was the highest wage earner as you will be able to collect up to half of their monthly benefit.

  • You Can Work and Claim Benefits – Just Watch What You Earn

There is no rule that states that you cannot work while receiving benefits. However, be mindful of how much you earn and when you claim them. If you are under full retirement age (66 or 67 depending on when you were born) you can only earn up to $17,640 a year until your benefit starts to get reduced. Every $2 dollars that you earn over that will be reduced by $1. Once you reach full retirement age you will be able to earn as much as you like without a reduction in Social Security.

  • Survivor Benefits Kick in at Age 60

Widows and widowers can also collect benefits as survivors of a deceased spouse on their own behalf. You can receive a deceased spouse’s or deceased ex-spouse’s Social Security benefits if you’re aged 60 or older and the benefit you would be entitled to is higher than what you’d receive based on your own earnings. You won’t lose these benefits if you remarry either, as long as you’re 60 or older. You may, however, need wait until reaching your full retirement age to claim 100% of the survivor benefits.

  • You Can Temporarily Pause Benefits

 One common misconception is that you are stuck with your Social Security benefit once you start receiving it. If you are at least full retirement age you may temporarily stop receiving your benefit and start it again at a later date. This will allow your benefit to grow until you begin claiming them again. Keep in mind that if you were to do this while under the FRA you will need to pay back any benefits your received prior.

  • Longevity Matters for Claiming Benefits

The earliest you can begin claiming Social Security is age 62. Doing so, however, would reduce your benefit amount. Waiting until full retirement age would entitle you to your full benefit amount and to take it one step further, delaying your benefits until age 70 could result in an approximately 32% increase in your monthly benefit amount.

For many years, the full retirement age was 65, but these days it’s 66 or 67 (depending on what year you were born). If you’re hoping to retire at 65, you’ll have to wait longer to get your full benefit amount. Whether it makes sense to do so depends on your expectations for longevity.

If you expect to live until 90 or beyond, waiting until full retirement age or age 70 to claim benefits may make more sense. Conversely, if you don’t expect to live as long, taking your benefits early would allow you to use that money when you need it.

When it comes time to apply for Social Security it is imperative that you make an informed decision. The advisors at Blue Bell Private Wealth Management are here to help you with this. Even if you are not a client, BBPWM offers a complimentary claiming strategy to anyone who has access to their Social Security Statements. Just follow this link and enter in the required information and within 24 hours we will send you a customized report.

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5 Things You Should Know About Social Security

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