Social Security ~ Time to Sign Up!

There's lots of advice out there on how to get the most out of your Social Security benefits - articles, websites, and newsletters.  I'm not going to attenpt to cover the whole subject in this blog, but will give you a few pointers.  We read many of them in order to prep ourselves for starting our SS benefits.  Some of the better sources of info include fidelity.com, Forbes, or Prudential.com which has a downloadable report called "Innovative Strategies to Help Maximize SS Benefits" research.prudential.com/documents/rp/InnovativeSocialSecurityNov2012.pdf.

But also don't forget to check the government SSA website, ssa.gov.   There are a lot of tricky moves you can make if you do not need to start taking distributions immediately, but the main thing to know is the longer you can delay starting your benefits, the more your benefits will grow.  Although you are eligible for SS benefits at age 62, your benefit increases at a rate of 8% per year for each year you delay - a pretty good rate of return.  This increase continues to age 70 when you are required to start taking your benefits.  I held off until age 67, when I decided that work was not much fun any more.

Going to the Local SSA Office

Another avenue for good information is to go meet in person with your local Social Security Administration office.  Le Anna and I did this several months ago just to see what we could learn.  Let me just say that you will see a lot of interesting people at the SSA office.  After taking a number and waiting for our turn, we

were able to meet with a very knowledgeable and friendly representative.  She clearly explained the primary options for each of our own benefits and our 'Spousal' benefits, and which combination would most likely be the best for us.  Since both Le Anna and I had worked for many years, we were both eligible for benefits.

Our Choices

Since Le Anna just turned 66, both of us are now full retirement age, which opens more options for how you take your benefits.  For us, the option that made the most sense (translation = highest benefit) was for Le Anna to file for her spousal benefit (50% of my benefit at age 66), and for me to file for my regular benefit.  But at the same time, Le Anna can let her own benefit continue to grow at 8% a year until age 70 1/2, and then switch from her spousal benefit to her own, which will then be worth more than the 50% spousal.  Follow that?  Anyway, there are several other options for married couples which can increase your overall benefits if you have some flexibility on when to start drawing.

Signing Up

So we went back to the local SSA office last week to sign up, after making an appointment ahead of time.  We live in a fairly small town, so the local office is not overly crowded.  If you live in a large city, you might want to opt for filing online instead.  For us the process was easy and only took about 15 minutes.  Our SSA rep was again friendly and helpful, and willing to answer all our questions.  One thing we learned was that the benefits are paid in arrears, which means your first check will come in the month following the start of your benefits.  Don't forget that your SSA benefits are potentially taxable income, so it's probably a good idea to have some taxes witheld, or allow for the benefits in calculating your quarterly estimated taxes, so you are not shocked next year at tax time.

You've heard a little about our experiences getting signed up with Social Security.  If you are getting ready to do the same, we hope that we have given you some insight into the process and options.