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Social Security Facts You Need to Know

Fact: You can start taking social security benefits at 62 and one month, or any month after that until the month you turn 70. That's 96 different options of when to apply for benefits!

Fact: Not Your Father's COLA! The cost of living adjustment (COLA) for Social Security Benefits in 2009 was 5.8%, since 1975 the averaged annual increase has been 4.4% per year.

After years and years of paying into the Social Security system, many Baby Boomers nearing retirement age are eager to start collecting the benefits they have earned.  While you are eligible to begin collecting benefits at age 62, doing so can cost you thousands of dollars over a lifetime!  How?

For every year that you delay collecting Social Security benefits, the amount of the monthly payment you receive increases.   While an increase of a few dollars each month may make you question whether delaying benefits is worth it or not, those few dollars each month can really add up over a lifetime.  Also, if you live longer than you’ve anticipated, delaying benefits can help keep you living comfortably because you’ll have more money to work with as other resources and savings are depleted. 

Here’s an example for you that was recently on CNN Money:

61-year-old Mary, who currently earns $55,000, is deciding when to retire. If she were to file for Social Security benefits next year at 62, she would receive around $15,400 a year, according to T. Rowe Price's Social Security benefits evaluator. If she waits until 66, however, her annual benefits would grow to around $20,500 per year. And if she is able to hold off for several more years, until age 70, her annual benefits would climb to roughly $27,100 per year.

Source: http://money.cnn.com/2013/07/31/pf/expert/social-security-benefits/

Delaying benefits until age 70 as this example suggests won’t work for everyone.  You have to create a plan based on your own individual circumstances.  Your plan will depend on your other retirement resources, financial situation, your spouse’s plans and how you plan to spend your time during retirement. 

Strategies for Delaying Benefits to Consider

For many baby boomers, the best way to delay retirement is by continuing to work until they are at least 66, full retirement age.  If this is not an option for you or you can’t continue in your current role for some reason, finding part time work for a few years may help bridge the gap. 

Again, the strategy you choose should be based on a number of factors including your overall health, your overall financial situation and your plans during retirement. 

For more information about strategies to maximize your Social Security benefits request a copy of our free guide, Social Security Planning for Baby Boomers.   

The Social Security system is complex.  It takes years to navigate the ins and outs of the system and just when you think you’ve got it figured out, they change something!  The Social Security Guys have been working in this industry for years and like to pass on the little known strategies that they’ve learned over the years to help you maximize your monthly Social Security benefits and have a better retirement.  

Here are The Social Security Guys top 5 facts about Social Security that you need to know:

1. Guaranteed Income – That’s right, Social Security is guaranteed income.  Once you apply and are approved, you will receive Social Security for life in the form of a monthly payment.  Not only will you receive it for life, but you will also get an annual raise based on the cost of living increase (COLA).

2.  Direct Deposit Prevents Fraud – The best way to insure that your Social Security payment gets to you every month is by signing up for direct deposit.  With direct deposit your monthly Social Security payment will be electronically transferred to the bank account of your choice eliminating the potential for someone to fraudulently cash your Social Security check.   

3.  You Can Work and Collect Social Security – Many Baby Boomers nearing retirement age aren’t ready to fully retire but worry that continuing to work will prevent them from collecting Social Security.  While there are some limits as to how much you can earn while working and collecting Social Security, you can definitely work.  In fact, working a little longer and putting off applying for Social Security could actually INCREASE the amount of Social Security you get when you do apply so learn the rules about working while collecting Social Security.

4.  Your Spouse is Covered – When you are planning for retirement, most couples share the concern that if one spouse passes away before the other, they want to know that their spouse will be financially stable without their income.  Your spouse will be able to continue collecting their own Social Security benefits or apply for Survivor Benefits.  You should know the different amounts your spouse is eligible for and understand which would be the best route to take as you are planning for retirement.   

5.  You Can Increase the Amount of Social Security Benefits You Receive – That’s right, you can legally increase the amount of Social Security benefits you receive just by knowing when to apply and which aspects of the Social Security system could be most beneficial to you and your specific situation.  This can be achieved with a personalized Social Security plan in conjunction with your overall retirement plan. 

 

For more information about Social Security planning, contact The Social Security Guys at 1-888-243-4995 or visit our services page.  

President Obama Signing the Affordable Care Act

As October begins, the country braces for the impact of Obamacare.Some are excited by the changes it will bring, while others are anxious about the financial impact it will have on them. For the purpose of this post, I am not going to talk about the ins and outs of Obamacare from a healthcare perspective. Instead, I want to touch upon the impact that Obamacare may have on some Baby Boomers from a lifestyle perspective.

Early Retirement?

Let’s face it; many Baby Boomers plan to stick with their jobs for access to affordable health insurance.  Currently, if you are under the age of 65 and don’t have access to Medicare, leaving a job that offers healthcare would mean the premiums would have to come out of your own pocket.  

The introduction of Obamacare will change that.  Individuals nearing retirement age will no longer be reliant on their jobs for the purposes of health insurance.  Instead, individuals can retire early, if they are financially able to do so, and shop the healthcare exchange for a policy that fits their needs to get them through until Medicare kicks in at 65.

While Baby Boomers may not need to rely on their jobs for health insurance coverage, it is still important to keep in mind that early retirement could have an impact on you in other ways.  If you retire early and start collecting Social Security as a result, you could miss out on tens of thousands of dollars over the course of your lifetime in Social Security benefits so consult a professional before making the decision to retire early. 

The introduction of Obamacare could have a big impact on the work force.  We may see Baby Boomers opting for early retirement which would in turn open up higher paying job for a younger generation.   A positive change for those looking to move up the ranks!

If you would like more information on Obamacare and what that means for you in retirement, attend our upcoming Healthcare Workshop on October 9, 2013.  Visit our workshop page for details.  

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Copyright (c) The Social Security Guys® 2014. All rights reserved. 6631 Main St, Williamsville, NY 14221, 716-633-1515. Securities and investment advisory services offered through NEXT Financial Group, Inc. Member FINRA/SIPC. The Social Security Guys® are not an affiliate of NEXT Financial Group, Inc.