Hello, my name is Amy Pucci, I am a Certified Senior Advisor here at Tull Financial Group. We have many clients who are in or nearing retirement and we get a lot of questions on social security. The most common question is “when should I claim my benefits?” With the ongoing volatility in the stock market and not knowing when this volatility may end, many folks who are nearing or in retirement may be inclined to go against their original plan and claim benefits at an earlier age.
Here are a couple of things that folks may not think about when making this decision:
- Claiming your SS benefits as early as age 62, and before your full retirement age (FRA) will reduce your benefits and maybe even your spouse’s benefits for life. Full retirement age is somewhere between 66 and 67 depending on the year you were born. So, if you are married and are the higher earner, should you pass away, your spouse’s widow benefit could be drastically reduced for the remainder of his or her lifetime. This is a big deal if your spouse does not have a pension or other form of guaranteed income.
- Second, if you are still working and have not hit your FRA, your benefits will be reduced by $1 for every $2 you earn over the 2020 annual limit of $18,240.
If you have jumped the gun and recently claimed benefits early, you have the option of a one-time reset. You can reverse your decision within in the first 12 months of claiming. The downside of this is you will have to repay any amount that has been paid out to you since you started receiving benefits.
The other option would be to suspend your benefits until a later date. Maybe you get through these uncertain times and chose to suspend your benefits a few months down the road. This will allow your benefits to earn delayed retirement credits of 8% per year. You may then restart your benefits any time up until age 70.
In summary, Social Security claiming strategies can be a bit overwhelming. The key here is, don’t make any rash decisions when it comes to claiming options. Press pause and speak to your financial advisor. If you do not currently have an advisor, give us a call at 757-436-1122! We would be happy to speak with you!
Thank you for watching. Have a great day!