The most expensive social security error you can commit



<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Social Security is vital to the financial health of Americans, but it is also an extremely complicated program. The manual used by the Social Security's own employees is hundreds of pages long and full of obscure rules that can confuse even those who know social security from top to bottom. It is therefore not surprising that millions of people make mistakes in the management of social security that cost them money. "Data-reactid =" 11 "> Social security is essential for the financial health of Americans, but it is also an extremely complex issue.The manual used by Social Security employees is hundreds of pages long and full of rules. obscure ones that can confuse even those who know about social security, so it is not surprising that millions of people make mistakes with social security that end up costing them money.

Much of the debate on social security has focused on the impact of decisions on the age at which you start collecting monthly benefit checks on what you receive from the program in your lifetime. These arguments are valid and in some cases a decision may indeed have a considerable advantage over another. However, there is a costly social security mistake that many people make, it's undeniably something to avoid – and at the same time especially easy to avoid.

Two white-haired people sitting on a beach beside driftwood on a stormy day.

Source of the image: Getty Images.

Composing with the death of a spouse

One of the most confusing aspects of social security is the way in which a person's retirement benefits interact with the benefits to which you are entitled as spouse of another beneficiary of the security social. In most cases, as long as your spouse is still alive, you are entitled to receive the greater of the amount of your own pension benefits and the amount you are entitled to receive as a spousal benefit. , based on your spouse's work history. Generally, you are not allowed to claim a benefit while letting another continue to grow because the changes made to the law in recent years have almost removed that right for new retirees. Instead, you are expected to collect both your own pension benefits and all the spouse benefits to which you are entitled at the same time.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The way social benefits of social security change after the death of a spouse. survivor benefits giving you the right to receive an amount based on what your spouse was receiving at the time of payment of the pension benefits. In fact, survivor benefits tend to be available sooner than your own retirement benefits, with surviving spouses becoming eligible to claim survivor benefits at 60, instead of the minimum of 62 for pension benefits. "Data-reactid =" 27 "> The way social security benefits work changes after the death of a spouse.At this time, survivor benefits entitle you to collect an amount based on the amount of the benefits. pension benefits that your spouse received at the time of death.be available sooner than your own pension benefits, surviving spouses becoming eligible to claim survivor benefits at 60, instead of the 62-year minimum set for retirement benefits.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For some reason, survivor benefits are not the same. Do not Interact It is true that if you claim both benefits at the same time, you will always receive the higher amount, but unlike most other benefits, the surviving spouse may choose to receive just one of these benefits and delay the demand for the other benefit. As you will see below, not taking advantage of this opportunity can be extremely expensive. "Data-reactid =" 28 "> For some reason, survivor benefits do not interact with pension benefits in the same way as spousal benefits, although if you claim both At the same time, you will always receive the higher amount, but unlike most other benefits, the surviving spouse may elect to receive only one of these benefits and delay the other's claim. See below, not taking advantage of this opportunity can be extremely expensive.

Would you like to give $ 763 a month in additional benefits?

To see how this can be played out in real life, let's take a simple example. Suppose you are a surviving spouse born in early 1957, who has just turned 62 and whose work history allows him to receive retirement benefits of $ 1,600 a month at retirement age , which corresponds to 66 years and a half. Depending on the work history of your deceased spouse, you can also claim a survivor benefit of $ 1,600 a month at retirement age.

If you claim both benefits now, both will be reduced to reflect the early deposit of benefits. The reduced survivor benefit would be $ 1,285 per month, while the reduced pension benefit would be $ 1,160 per month. Social security would pay only the higher of the two, which would give you a one-time payment of $ 1,285 a month.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "However, you can simply claim your survivor benefit now All by allowing your pension benefits to continue to increase, you will still get $ 1,285 a month from the SSA, but you can then claim retirement benefits later at retirement age and get $ 1,600 a month, That's $ 315 more than you would receive now, or alternatively you could wait until you're 70 and earn $ 2,048 a month, thanks to the deferred retirement credits. increase your future monthly payment up to $ 763 – without giving up anything now. "data-reactid =" 36 "> However, you can simply claim your survivor benefit now while leaving your pension benefit continue to increase.You would still receive $ 1,285 per month from the SSA.But you could then claim retirement benefits later at retirement age and receive $ 1,600 a month, or $ 315 more than you would have today.You can also expect to have 70 years and get $ 2,048 a month through deferred retirement credits., You could increase your future monthly payment by at least $ 763 – without giving up anything now.

Do not make this mistake

The sad thing is that many social security recipients make this mistake every day. Even if you consult directly with the SSA for help on your claim decision, you can not afford to rely on them to avoid making the wrong choice and cost you tens of thousands of dollars during your life.

If you have lost your spouse, know that the consequences of applying for social security are more complicated than you thought. By getting help from not only SSA but also reputable advisors, you can make sure you get every penny out of social security that you deserve.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 40 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The Motley Fool has a disclosure policy."data-reactid =" 48 ">Motley Fool has a disclosure policy.


Source link