Social Security

Your Social Security

Yesterday, we at HM&M had a very interesting and informative presentation by Chad Dziedzic from Black Rock on Social Security, courtesy of Kavon Moradi of AXA Advisors.  I’m summarizing here a few key points for our clients and friends, particularly those age 55 to age 70.

It seems that most people don’t get annual paper statements anymore.  (I do. I may be an exception because of my advancing age and the government’s worry that I can’t work a computer.)  You can get your statement and a lot of good information at the www.ssa.gov.  Take a few minutes to register and you can get your personal information instantly.  Why?

Did you know that you only have 3 years, 3 months, and 15 days to correct a year’s social security reporting error?  That’s why.  Check your statement every year.  Print and keep a copy. (Or save it in the cloud like me – a tech savvy old man.)

Did you know that you must have at least 40 credits (about 10 years) to participate in social security?

Did you know that that your benefits are computed using your best 35 years of employment (money-wise not fulfillment-wise)?  If you did not work and pay into social security for 35 years, you get zeros until you have 35 years total.

Did you know that 74% of people start collecting their social security benefits early at age 62, reducing their benefits by up to 25% compared to benefits at full retirement age (66 for me)?

Did you know that if you delay collecting your social security until age 70 and, thus, earn delayed retirement credits, your monthly benefits will be about 32% greater than your monthly full retirement age benefits?

Have you ever heard of “file and suspend”?  If you are at least full retirement age, you can elect to file for benefits and suspend collection of those benefits until a later date (say 70).  This would enable your spouse to collect spousal benefits while your own benefits earn delayed retirement credits.  Then, if your wife is eligible for her own benefits, she can collect them at a later date (say 70) and take advantage of her own delayed retirement benefits.

If you are married, have you thought about social security planning as part of your retirement planning?  By considering both spouses, their ages, their health, and their family histories of longevity, among other factors, a good social security plan can yield hundreds of thousands of dollars of extra benefits.

Did you know that a healthy female, age 65, has a 50% chance of living until age 88 years?  Reread the prior paragraph.

So, hopefully, you know more social security than you did a few minutes ago.  I certainly know more than I did yesterday at 8:00 a.m.

Vance