By Sue Stevens
No matter what age you are now, you probably think about Social Security benefits as they relate to your retirement planning. If you are younger, you may choose to run retirement projections with reduced or no benefits. For those of you who are middle-aged to retirement-aged, Social Security will probably be a piece of your retirement picture.
Lots of questions arise about Social Security as individuals go through many of life's changes including divorce, phasing into retirement, or dealing with the death of a spouse. Use these tips and traps to educate yourself about your options.
Tips
- When you get your annual estimate of Social Security benefits, check to make sure your earnings history is accurate. Everyone age 25 and older should be receiving an annual statement. If you suspect something is wrong, contact your local Social Security office to correct any inaccuracies.
- If both spouses work, each is entitled to a benefit based on his or her own earnings history. However, the spouse with lower benefits is entitled to the greater of 50 percent of his or her spouse's benefit or his or her own benefit.
- If you did an analysis showing that taking lower benefits at age 62 broke even with waiting to take higher benefits at age 65, that break-even age would be approximately 78. So, if you think you'll live past age 78, you may want to wait until full retirement age to start taking benefits. Of course, no one knows just how long they'll live, so look at your family health history and your own health situation to make a realistic guess.
- You can choose direct deposits at your bank for your Social Security benefits and never have to worry about a check getting lost in the mail.
- If your spouse has a pension from his or her former employer that will pay over his or her life only, delay taking Social Security so you'll get the maximum benefit for your own lifetime.
- If you are divorced and your ex-spouse has remarried, both you and the new spouse can collect benefits based on the ex-spouse's earnings history provided you were married at least 10 years and you apply for benefits after age 62.
- If you are still working late in life, delay taking benefits until age 70. Social Security will pay a premium above the full benefit if you wait until age 70 to take benefits.
- If you are a widow or widower, you can start taking Social Security benefits as early as age 60. But you may want to consider starting them later so that you'll get a larger benefit.
Next: Traps to watch for >
