Have you factored Social Security benefits into your overall retirement strategy? Roy Kramer, CPA, CDFA, CDS, NSSA, a certified National Social Security Advisor and member, tax services at Brown Smith Wallace, discusses strategies that people often overlook when claiming Social Security benefits.

1. 10 Things You Should Know About
Social Security Planning
1) There are several options on how and when to
claim Social Security (SS) benefits.
> Social Security Administration employees
know the mechanics of applying for benefits
but cannot advise on an optimal strategy.
2) Married couples have on average 10-12 options.
> Combining delaying benefits to age 70 with
“restricted application” and “claim and
suspend” may result in maximum benefits.
3) A divorced spouse may collect spousal benefits.
> a) Did the marriage last 10 years?
b) Have the ex-spouses been divorced for
at least two years?
c) Are both you and your ex-spouse age
62 or older?
d) A divorced spouse can choose among
multiple ex-spouses to maximize benefits.
4) Life expectancy has steadily increased while rates
of return on investments have decreased. Many
retirees could potentially outlive their resources.
The following factors may impact the decision to
collect benefits at age 62:
> a) Health
b) Finances
c) Children
d) Continued employment
5) Give strong consideration to leaving maximum SS
benefits to a surviving spouse.
> The decision to take benefits prior to Full
Retirement Age (FRA) might impact the
amount received by a surviving spouse.
6) Claiming Social Security and taking withdrawals
from taxable retirement plans can often
inadvertently increase tax on social security.
> Tax strategies are critical to maximize the
benefits that are flowing through to your
pocket.
7) Many retirees continue employment long past
the “normal retirement age.”
> Claiming your benefits before normal
retirement age while continuing to work
could force you to pay back some of your
benefits.
8) A single person wishing to wait beyond FRA
should utilize the “claim and suspend” strategy.
> Using this strategy will provide a cash
reserve if necessary.
9) Your employment earnings record on the Social
Security website (www.ssa.gov) might be
incorrect.
> Setting up an account with Social Security
and reviewing your information long
before retirement is easy. Correcting
errors can be time consuming and should
be performed before applying for benefits.
10) How benefits are calculated:
> Social Security benefits are computed by
taking the highest 35 years of indexed
earnings. Earnings after age 59 are not
indexed for inflation but still count in the
calculation. Zero earnings years also count
in the calculation.
Disclaimer: The above list is not inclusive. Please consult with a qualified expert before making a decision regarding Social Security benefits.
For independent Social Security advice, contact:
Roy Kramer, CPA, CDFA, CDS, NSSA
Member, Tax Services
314.983.1265 | rkramer@bswllc.com