ParentCare » Vol. 21

Did You Know That Choosing The Right Strategy For Taking Social Security Retirement Benefits Could Put an Extra $50,000 in Your Pocket?

By Tom McDavitt

1262304aWhile planning for retirement, most people don’t think too long about how to maximize their social security income. For many it is simply a decision related to the age at which they plan to retire and not much more than that. Did you know that you could increase the amount you receive over your lifetime with a little planning? You should really take the time to look at this part of your plan. A recent study suggested that there is as much as $10 Billion in unclaimed benefits by retirees today!

The answer isn’t simply electing to delay benefits to a later age to improve the numbers; there are alternate strategies available to take benefits sooner and yet collect the most income. There is nothing sinister about these strategies! They simply utilize the rules available to maximize your payout. Let’s look at a hypothetical example couple to illustrate what we mean.

John is 62 years old and qualifies for a monthly benefit or “primary insurance amount” (PIA) in social security terms of $1,800. His spouse, Mary, is also 62 and she qualifies for a PIA of $1,000 based upon her earnings. Let’s assume that they both live to their average life expectancy from that point. If they simply elect their respective PIAs at age 62, they could lose over $50,000 in family benefits. If you think the solution would be to have both spouses wait until “full retirement age” (FRA) to collect, you’d be wrong. It would in fact result in about $30,000 less than their best solution! Furthermore, you might think that both waiting until age 70 to collect would be the best strategy. Think again! That would result in more than $40,000 less than the maximum payments.

So then, what is the answer? You will need to look into “switch strategies.” There are two basic techniques to employ switch strategies. They are “file and suspend” and “restricted application.” Don’t expect to hear about these ideas at the local social security office; the agents are trained to help you get your maximum benefit today, but not necessarily over you and your spouse’s lifetimes. The solution is to get a family benefits analysis using software that will examine all of your possible options to find the one that best fits your situation. Please make note that what works best for your friend or neighbor may not be best for you. Their situations could be very different than yours.

There are numerous websites and calculators available for a modest fee that will help you find the answers, including and You can input your personal data and they will illustrate each of the options available for you. Otherwise, you might be best served by consulting with your financial advisor for a personalized analysis.

Tom McDavitt, located at 102 Shore Dr. Suite 400, Worcester, MA is a Registered Representative and Investment Adviser Representative with/and offers Securities and Advisory Services through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser.

Photo by john rowley / Mood Board / Rex Features

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