Are you steadfastly relying on the estimates provided by Social Security? Are you 59 years old and about to get married for the second time? In either case, stop what youre doing and read this first. It could help you down the road.
There is a lot of misunderstanding about Social Security, which is why Bank Investment Consultant has been offering tips and videos over the past week on the program. Specifically, weve been focusing on how to manage your clients benefits from the federal program.
We asked regular magazine contributor Dave Lindorff to research and compile a set of tips for advisors. So far, weve presented 14 and today we have the next three. And check back tomorrow as we complete the list.
In making plans for your retirement, dont rely on the estimates from the Social Security Administration about your likely future retirement benefits.
Financial advisors and their clients should not rely on those estimates that SSA sends out each year predicting what a clients retirement benefit amount is likely to beparticularly if you are still years away from retirement. The Social Security Administration does not factor in either inflation or any general average increase in wages. Since both are likely based upon historical trends, your future benefits are likely to be higher for any age than the estimates provided by the SSA.
People who divorce after 10 years of marriage and who then remarry normally cannot later receive spousal retirement benefits based upon an exs benefits. But there is a big exception: people who remarry after age 60.
If you are a divorcee and the love of your life is not a big earner while your ex was wealthy, you may want to hold off on the nuptials until you pass age 60. That way, you can get spousal benefits in retirement of 50% of your exs benefit amount, and if he or she expires before you, youll get the full spousal benefit too.
Higher earning spouses should not take Social Security before early retirement age for the sake of their significant other.
If you retire early, you lock in a low retirement benefit amount, and thats all your spouse will get for life if you die. On the other hand, if you dont retire early, but should happen to die before reaching full retirement age and filing for your benefits, your surviving loved one will nonetheless receive a widows benefit of whatever your full-retirement benefit would have been at 66.