HOW OLD YOU ARE WHEN YOU FILE for Social Security can have a huge impact on your monthly income in retirement. But there isn’t one age that’s right for everyone. In fact, the best age for you to claim your benefits may change as your life situation changes.
Complicating matters, rule changes that took effect in 2015 have narrowed couples’ options. These changes put an end to two Social Security claiming strategies that many married—and divorced—couples found useful in boosting their retirement income.
One useful tool to help you sort through and better understand your options is Merrill Lynch's Social Security Analyzer. "If you've run an analysis with your advisor in the past, you need to take a second look," says Ben Storey, a director of Retirement & Personal Wealth Solutions at Merrill Lynch.
"If you've run an analysis in the past, you need to take a second look."— Ben Storey, Director of Retirement & Personal Wealth Solutions, Merrill Lynch
The Social Security Analyzer, which your advisor can walk you through, takes into account a range of factors, including your earnings, your spouse’s earnings, and your potential life expectancy. It then produces a maximized strategy that highlights how you both could receive the greatest lifetime benefits.
In general, the longer you wait to start your payments, until age 70, the more you'll receive each month. And one spouse's choices may affect the other's. "When you claim your benefits will have an impact not only on your own income but also on the survivor benefit your spouse will receive if you die first," Storey says.
For more help in making this complicated decision, read “Social Security: Aiming for Smarter Payments.”
3 Questions to Ask Your Advisor
- How can my spouse and I maximize our Social Security benefits?
- What role should my Social Security benefit play in covering my living expenses in retirement?
- Would waiting until age 70 to claim Social Security make the most sense for me?
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This material should be regarded as general information on Social Security considerations and is not intended to provide specific Social Security advice. If you have questions regarding your particular situation, please contact your legal or tax advisor.