Six Financial Best Practices for 2020
Written by Andrew Hunt
Written by Andrew Hunt
As many people know, delaying the receipt of Social Security provides an increased benefit until age 70. Many times the amount of the increase is misunderstood. It is often substantial, especially if the benefit is taken before Full Retirement Age!
It’s a little known fact that you can reset your Social Security payment amount during the first twelve months after initiating the benefit. We find that the best way to illustrate the details of how this change can be made is through an example:
Let’s say that you chose to take your reduced Social Security benefit at the early retirement age of 62 and lets say that benefit amount is $1000 per month. If you had waited until the Full Retirement Age of 66, your benefit would have been 33% greater or $1,333 per month. As you can see, this is a significant difference! Once you learn about the disparity in lifetime benefit you might change your mind on which benefit to take. And you are entitled to do so, as long as it has been within the first 12 months of receiving your benefit.
To have a Social Security reset you must payback all of the money you received within the first 12 months of starting payments.
There is no interest or penalty for choosing to reset your Social Security benefits. Once you payback the amount received, you can re-apply for benefits at your new attained age or wait until a later date.
An important note to remember is that you can only do this once and you cannot revoke the decision once you have made the election to reset your payments.
Consult a Professional
Unfortunately, most people make Social Security decisions without consulting a professional. You may be surprised to learn that the Social Security office is not allowed to give advice on strategies that would help maximize your potential benefit. An expert in Social Security planning can take into account variables such as your current age, life expectancy, and financial assets in order to help you identify an election planning strategy best suited to maximize your lifetime Social Security benefit.
Don’t miss out on tens if not hundreds of thousands of dollars in lifetime Social Security benefits by making an uninformed decision. Call or email us today to arrange a time to discuss your unique situation.
Learn more about Hiley Hunt Wealth Management and who we serve in Omaha, NE – Financial Planning and Investment Management