Murrieta, CA, April 02, 2016 --(PR.com
)-- Delayed Retirement Credits. Restricted Application. File and Suspend. Earnings Test.
For those close to retirement who are unschooled in the Social Security system, it’s best to get a qualified consultant for help maximizing lifetime Social Security income before selecting a claiming option, says Ross Hunt, CFP® of RMH Advisors in Murrieta), an NSSA Advisor certified by the National Social Security Association.
Hunt says taking Social Security too early, or not coordinating spousal benefits can result in a married couple losing up to $100,000 in lifetime benefits.
Last November, President Obama signed the Bipartisan Budget Act of 2015, which increases the federal debt limit while it phases out two powerful Social Security claim strategies - Claim and Suspend and Restricted Application. These strategies help couples maximize their benefits by coordinating spousal benefits.
The Restricted Application strategy allows a spouse to collect a spousal benefit without touching their own benefit. Thus a husband could file a Restricted Application to collect a spousal benefit, allowing his benefit to grow eight percent per year to age 70.
The File and Suspend strategy allows for the payment of spousal benefits while the wage earner suspends his or her own benefits. Thus, a wife could collect a spousal benefit while the husband’s benefits have been suspended. Of course, the husband’s benefits will grow eight percent per year.
File and Suspend and the Restricted Application strategies are only available upon reaching Full Retirement Age, which is age 66 for folks born between 1943 and 1954.
Folks that reached age 62 by the end of 2015 are still permitted to file a Restricted Application at their Full Retirement Age says Hunt. “For people who were not age 62 by the end of 2015, the Restricted Application is no longer available,” says Hunt.
Folks reaching their Full Retirement Age by April 30, 2016, may still File and Suspend their benefit to allow for the payment of spousal or children’s benefits off of their record. The deadline to actually File and Suspend is April 29, 2016.
Baby boomers still need to review the coordination of benefits between a husband and wife to determine the best time to take worker and spousal benefits.
“For example,” says Hunt, “if you turned age 62 by the end of 2015, then you can file a Restricted Application upon reaching your Full Retirement Age. Of course, to receive any benefit by filing a Restricted Application, your spouse must either be receiving a benefit or have Filed and Suspended.”
A person must reach Full Retirement Age by April 30, 2016 in order to be eligible to file and suspend by the April 29, 2016 deadline. File and Suspend preserves the following Social Security benefits of building a cash reserve until the age of 70 and allows payment of spousal or children’s benefits while benefits have been suspended.
There is confusion regarding Delayed Retirement Credits (DRCs), admits Hunt. The changes in the budget bill do not impact DRCs. Thus, DRCs are earned if benefits are delayed until beyond Full Retirement Age, says Hunt.
“If you have longevity in the family, your health prognosis is good and you have adequate income to live on until age 70, this is part of the strategy to maximize Social Security earnings,” says Hunt.
Even with the changes, folks should not ignore the coordination of spousal benefits, says Hunt. Higher-income earners might consider taking benefits prior to age 70 to allow for the payment of spousal or children’s benefits earlier. “A professional advisor can help individuals with their unique situations,” he says.
Lastly, Hunt urges future retirees not to forget that Social Security may be a joint lifetime benefit. “Do not make this decision lightly,” he says.
For more information about Social Security claim changes in the Murrieta area, contact Ross Hunt at RMH Advisors, LLC at (951) 696-5292, firstname.lastname@example.org, or www.rmhadvisors.com.
About Ross Hunt & RMH Advisors, LLC: Ross S. Hunt, CFP® has been providing sound financial advice and guidance to his clients for more than 30 years, committed to helping individuals and families meet and exceed their financial goals. Ross Hunt is Managing Partner and with his wife, Mary, are cofounders of RMH Advisors, LLC, a fee-only, Registered Investment Advisory firm located in Murrieta, CA. Ross has built his advisory business by combining a sound asset class investing methodology with holistic financial planning and first-class client service. It’s no coincidence that more than half of Ross’ clients have been with him for more than 20 years!
Ross Hunt is a registered principal with and securities offered through LPL Financial, member FINRA/SIPC. Financial Planning offered through RMH ADVISORS, LLC, a Registered Investment Advisor and separate entity. The National Social Security Association (NSSA) is not affiliated with LPL Financial.
The NSSA Advisor program is taught by Premier Social Security Consulting of Cincinnati, which educates professional advisors across the nation on the Social Security program. Premier awards NSSA Advisor accreditation to advisors who take the course and pass an assessment. For information about the NSSA Advisor certificate program, go to www.nationalsocialsecurityassociation.com.