seniorhwy.com

The age at which you start
collecting Social Security benefits can have a big
impact on lifetime income. In some cases, you can make
the most of your benefits by changing the start date
even after you filed.

Two little-publicized
tactics can help you stretch your benefits, especially
if you’re married.

Put benefits on ice.
If a spouse — let’s say the wife — earned less than
half of what her husband earned, she can collect a
spousal benefit, which is 50% of his benefit (her
benefit will be reduced if she collects before her full
retirement age). Once her husband dies, she can collect
a survivor benefit, which is 100% of his benefit.

If you want your spouse to
collect the biggest survivor benefit possible, you
should delay collecting your own benefit. For each year
you delay beyond your normal retirement age, you’ll get
an 8% boost in benefits. If your normal retirement age
is 66 and you wait until 70, your wife will receive 32%
more in survivor benefits when you die, plus any
accumulated cost-of-living adjustments (COLAs).

But there’s a catch. Your
wife can’t apply for spousal benefits until you file for
your own benefits. James Mahaney, vice president of
Prudential Financial, has this suggestion: You can file
for benefits at full retirement age and then immediately
suspend them. Once you file, your wife can apply for
spousal benefits; you can file again for yours years
later.

Mahaney shows how delaying
can boost your lifetime benefit and the survivor
benefit. A primary breadwinner who was due $12,000 a
year at age 66 would get $13,506 at age 70, assuming a
yearly 3% COLA. The same person who filed at 66 and then
suspended benefits would get $17,828 at 70, which
includes delayed credits and four years of COLAs.

You can only take a
“voluntary suspension” when you reach your full
retirement age. You can ask for a suspension when you
first apply for benefits or after you start receiving
them. The Social Security Administration will take a
request by phone or in writing.

Return your benefits.
If you claim your Social Security benefits early, at age
62, your benefits will be reduced by 25% forever. At
some point, you may decide that this was a big mistake.
If you think you’ll live a long time, why take a
permanent cut? Also, if you’re the primary breadwinner,
your spouse’s survivor benefit will be lower as well.

The good news is that
you’re not locked into that early decision. You can file
for a “withdrawal of application” at any time before you
turn 70. “The reason this provision exists is for people
who did not look ahead,” says Henry Hebeler, author of
Getting Started in a Financially Secure Retirement
(John Wiley & Sons, $20).

To undo your early
decision, you must return all of the money that Social
Security paid you over the years — in a lump sum. If
your wife is claiming spousal benefits, she must return
her accumulated benefits as well. But you won’t have to
pay any interest on the benefits you collected.

Consider these numbers
calculated by Hebeler, who runs AnalyzeNow.com, a
retirement-planning Web site. If you receive a yearly
benefit of $12,000 at 62, your benefits will total
$63,710 by age 66 assuming a 3% annual COLA. If you set
aside the money in an account returning 5% after taxes,
you’ll accumulate $71,960 — or a tidy $8,250 profit.
That means at 66 you can buy higher lifetime benefits by
withdrawing your claim — and you get to keep the extra
$8,250.

But it’s not a good idea
to file early for benefits simply to earn some easy
cash. If you die before you withdraw your claim, your
spouse’s survivor benefit will be stuck at the lower
benefit, Hebeler warns. And you’ll need to recoup the
taxes that you may have paid on the benefits when you
received them — and that can be complicated.

You’ll need to file a
Request for Withdrawal of Application (SSA Form
521). You can find the form at

www.ssa.gov or call

800-772-1213.
The Social Security Administration will let you know how
much you must repay.

By Susan B. Garland

Provided by

Why Plan for Retirement?

This is a question that I come across quite often when
researching and discussing retirement
planning and options. Despite the constant news
coverage of impending doom in regards to Social Security many Americans are still counting
on their social security payments to support
them through their retirement. The sad fact is that it
simply isn’t possible because the money
isn’t there. Sadder still is the fact that even if the
money were there, it is doubtful that it would
be enough to get the average American through their
twilight years.

Americans are living longer than they have in decades
past. In addition to longer lives we are
leading more active lives. Gone are the days when
retirees sat at home reading newspapers
and mowing the lawn every other afternoon. Today’s
retirees are traveling, taking classes,
learning to dance, and trying new things that they
didn’t have the opportunity to experience
while setting aside funds for the future and going about
the business of raising their own
families. Now they are taking the time to do all these
great things and these wonderful activities and pastimes
require funds in order to enjoy.

This is the number one reason you should begin as early
as possible not only setting aside
funds for your retirement but making active plans
on methods by which you can invest
those funds in order to maximize the potential of
limited funds. This is the time that it is
best to take your plans, goals, and concerns to a
financial planner and see what advice he
or she can give you on setting specific goals, better
defining your plans, and making the
most of your investment means while establishing a
realistic investment strategy that will
not leave you feeling strapped for cash month after
month.

We often overlook the important role that a good
financial planner and good planning play in
our financial futures. The same could be said of our
financial retirements. We need to take
every opportunity that is available to us in order to
maximize our money. A good financial
advisor will know of funds and strategies that we have
never heard of. It makes sense to
go to an expert when it concerns or family’s future. We
see experts when it comes to
matters of law, health, and taxes-why on earth shouldn’t
we see an expert for our finances?

Why is it so important to have a plan? The long and
short answer to this question is so that you
won’t end up needing a job in order to put food on your
table once you’ve reached retirement
age. The sad truth is that many of our retired
citizens are finding themselves strapped for cash
financially and barely able to make ends meet. If they
are fortunate enough to have homes that
are paid for, they often find the property taxes are a
little more than they can handle without
some sort of assistance. Medications are expensive
despite government programs to keep
costs down for our elderly, and then there are those who
are simply living longer than their
original retirement plans had accounted for. Combine all
these factors with the fact that the
cost of living has gone through unprecedented increases
over the last two decades and you
have some very real reasons to make plans for your
future retirement.

It is best to begin making these plans as early as
possible. It is not impossible to recover,

however, if you begin the process a little later. The
problem is that you will need to make

some extra investments along the way in order to make up
for lost time. The sooner you

begin making plans for your financial retirement the
healthier your retirement options will be.
The best way to go about this is to define your
retirement goals, make plans, and then take
your goals and plans to a financial advisor and get his
or her input. Investing smarter is much
wiser than investing harder.

Toni Shrader

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