Maximize Social Security Income
One of your baby boomer clients' top concerns is outliving their retirement savings.
The decision about when to collect Social Security retirement benefits is a key
factor in creating a successful retirement strategy.
For more detailed, client-approved answers, please download or order our Frequently Asked Questions: Social Security Retirement Benefits.
- Will I receive the amount reflected on my Social Security statement?
- Likely no. The amount reflected on your statement projects earnings through the noted collection age at a rate similar to the last two years. It does not take into account any cost-of-living adjustments.
- What happens if I plan to retire at age 60 and wait until full retirement age (FRA) to collect benefits?
- Your monthly benefit will most likely be lower than the amount reflected on your statement. The estimated benefit on your statement assumes you will earn the same amount you currently do through FRA, overestimating your earnings for a few years.
- Can I start collecting benefits and change my mind later?
- Maybe. You can file a "Request for Withdrawal of Application" form with the Social Security Administration (SSA), which, if accepted, would allow you to pay back the money received and refile. However, the SSA has recently restricted the use of this form.
- What will happen to my benefits if I am collecting but continue to work beyond FRA?
- The benefits will automatically be recalculated each year. If your current income is greater than any of the previously calculated "best 35 years," your benefits will be automatically adjusted upward.
- If I begin collecting before FRA, will my benefits be adjusted once I reach FRA?
- No. Reductions due to collecting early are permanent.
- What if I start collecting benefits but return to work prior to FRA?
- Part or all of your benefits may be withheld based on the wages you earn each year.
- Will I get back what the SSA withheld when I reach FRA?
- No. Any amount withheld is lost. However, the reduction applied to your benefits may be adjusted at FRA to account for the withheld benefits on a go-forward basis.
- At what point does Social Security become taxable?
- If your provisional income exceeds $25,000 (if you are single) or $32,000 (if you are married), a portion of your Social Security benefits are taxable.
- If I repay benefits, will I get credit for past taxes?
- You may be entitled to an itemized deduction or tax credit on your tax return the year of repayment.
- If I paid into both Social Security and a civil retirement system at some point in my work history, will my pension benefits affect my Social Security benefits?
- Yes. If you are covered by a pension under the civil retirement system and also qualify for Social Security retirement benefits, your Social Security benefits will be reduced through WEP.
- If I want to collect spousal benefits, does my spouse have to be collecting benefits?
- Your spouse must have filed for benefits but does not need to be collecting benefits. If your spouse is at least FRA, he or she can file for benefits and suspend collecting them until a future date.
- Can I collect spousal benefits on my younger spouse's earnings history?
- Yes, provided your spouse has filed for benefits.
- Do spousal benefits continue to increase beyond FRA like individual benefits do?
- No. Spousal benefits are at their highest at FRA.
- If my spouse collects benefits early, does that reduce my spousal benefits?
- No. Spousal benefits are always based on your spouse's FRA benefit and when you collect spousal benefits. When your spouse collects benefits will not have an affect on your spousal benefits.
- Can I collect spousal benefits then switch to my own later?
- As long as you are at least FRA when beginning to collect benefits, you can opt to collect only spousal benefits and switch to your own individual benefits at a later date.
- My spouse recently passed away. How do survivor benefits work?
- You are eligible to stop collecting your own benefits and take over the benefits of your spouse as survivor benefits. Assuming you are at least FRA, you would collect the greater of your spouse's actual benefits or 82.5% of your spouse's PIA.
- My spouse recently passed away. If I am still working, can I collect survivor benefits?
- Maybe. If you collect any type of retirement benefits prior to FRA, you are subject to the earnings test.
- I am a widow/widower collecting survivor benefits. If I remarry, do I lose the survivor benefits?
- Yes. You can opt to collect only survivor benefits and switch to your own individual benefits at a later date.
- Can I start collecting survivor benefits then switch to my own a few years later?
- At least age 60 (or age 50 if disabled).
- If I am divorced, am I entitled to benefits off my ex-spouse?
- Yes, as long as you and your ex-spouse were married for at least 10 years, have been divorced for at least two years and you are currently unmarried. If these conditions are met, you should be entitled to spousal and survivor benefits.
- If I am divorced, do I have to be unmarried to collect spousal benefits?
- Yes. You must be unmarried when applying for spousal benefits based on an ex-spouse's work history.
- If I am twice-divorced, can I collect spousal benefits on both ex-spouses' work histories?
- No. You are entitled to collect on only one record, but the SSA will pay you the higher benefits.
- Am I able to collect spousal benefits if I have earned a pension?
- If you did not pay into Social Security while paying into the pension system, a government pension offset (GPO) would apply. Your spousal and/or survivor benefits would be reduced by two-thirds the value of the monthly pension.
- Can my child receive benefits in addition to my spouse?
- Yes. Children under age 18, 19 if still in high school, can collect retirement benefits when the client files for benefits
- Do I need to wait until I am retirement age to begin collecting spousal benefits?
- If you are caring for a child under age 16 (or any age if disabled before age 22), you are eligible for spousal benefits even if you are not yet retirement age.
Pensions and the Windfall Elimination Provision (WEP)
Spousal and Survivor Benefits for Divorced Clients
Spousal and Survivor Benefits for Clients With Pensions
Take Advantage of BlackRock's Market Strategies
Everything You Really Need to Know About Social Security
Watch our seminar on Social Security fundamentals and strategies.
Social Security Benefits Estimator
Capitalize on Market Volatility
Help your clients see clearer – recognize opportunity in volatile markets.
Elite Advisor Intelligence
Retain the clients you have, grow your relationships and appeal to new clients.
Become a Retirement Account Expert
Help your clients build a retirement plan that works as hard as they do.
The New World of Retirement
Help your clients understand the new world of retirement.
Financial Professionals should check with their firm's compliance officer before distributing any content obtained from this site. This content is provided for your reference only unless otherwise documented.
BlackRock cannot be held responsible for any direct or incidental loss resulting from applying any of the information provided on this site or from any other sources mentioned. BlackRock is not engaged in rendering any legal, tax or accounting advice. Please consult with qualified professionals for advice in these areas.