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Your Financial Future

By Gary Boatman 3 min read
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Gary Boatman

When planning for retirement, the discussion always must start with income planning. How much money do you need every month to pay your bills and maintain your desired quality of life? Social Security is one of the most valuable retirement income sources. It cannot be outlived and gets regular cost-of-living increases. Most retirees receive it if they or a spouse had regular employment.

When making decisions, it is important to consider longevity. This includes life expectancy for both spouses. There are several ways that Social Security retirement benefits are calculated. First is from the person’s own work record. It will use the highest 35 earning years to calculate your benefit. They also consider your full retirement age. For anyone born before 1954, this is 66. People born after 1960 have to be 67. For the five years between these numbers, the full retirement age goes up two months each year.

The other two ways to receive retirement benefits are from a spouse’s work record. If you are currently married or divorced and were married for at least 10 years, you may be eligible for half of their benefit once you reach your full retirement age. This is the spousal benefit. If you remarry, you could collect the benefit off of your new spouse, but not the previous one.

The third way to collect is from survivor benefits. This is when one spouse dies and the remaining one collects the deceased’s benefit if it is higher than their own. To receive this option, you must have been married for at least nine months unless the death was due to an accident. This rule is to try and eliminate deathbed marriages. Also, this benefit may be available to an ex-spouse as long as the beneficiary did not remarry until reaching the age of at least 60. It is important to note that collecting any of these benefits has no effect on any other current or ex-spouses.

Longevity comes into play because, when possible, you want to try to maximize lifetime income for all parties. Health and life expectancy are major components. Normally it is important for the largest wage earner to delay starting benefits as long as possible. Their benefit can determine if a spouse gets any additional funds added on to their own account and often becomes the survivors benefit. A particularly important decision is often made at age 62 if the primary wage earner is getting ready to retire. For every year you begin receiving payments before your full retirement time, you give up approximately 6.5%. This lasts for a lifetime. If a spouse is significantly younger or has a much longer life expectancy, it can reduce lifetime income by tens of thousands of dollars or more. Be smart and make joint decisions when deciding about these important benefits.

Social Security now offers a new service. You can now schedule appointments online using Microsoft Teams software. Call 800-772-1213 and ask for a video appointment. If the representative determines that a video appointment would work, they will set up an appointment. If not, they will conduct an interview over the telephone or suggest an office meeting.

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