While some Social Security strategies have been discontinued, there are still a few under-utilized strategies…
Social Security is a very well run organization, contrary to most people’s belief. They are highly ranked as a customer friendly organization, but they are not designed to assist the beneficiary of Social Security in receiving the maximum benefit from the government program.
Here are just a few simple wills and will nots of SS:
When you apply, SS will determine the highest benefit you are entitled to whether single, married, divorced or widowed. SS will not advise you how to statistically get the most benefits over your lifetime.
If you continue to work after beginning your benefits, SS will update your benefit every year. SS is based on your top 35 years of earnings, so, if you continue working, your top 35 years may be ever-increasing and therefore so should your benefits. SS will automatically update your monthly benefit once a year based on your new high 35 years. However, SS will not tell you to apply for widows benefits when your spouse dies or, more importantly, when your ex-spouse, to whom you had been married for more than 10 years, dies. SS also will not tell you that, if you take benefits yet you or your spouse keeps working, your benefits or your spousal benefits may have exceeded the benefit you took years before.
SS will tell you that if you have a disabled child under 18, you can get dependent benefits when you retire. SS will not tell your disabled child that they may be entitled to the benefits of their deceased parents, if they had been diagnosed disabled before age 18.
SS will tell you what your benefits will be at age 62, but they will not tell you that you will get an 8% increase for every year you wait to age 70. SS may tell you that if you collect benefits before your full retirement age, you will pay back $1 for every $2 of your earned income until you reach your full retirement age. SS will not tell you that you will pay taxes on 50-85% of SS benefits.
Social Security does not purposefully deceive taxpayers or keep them from receiving maximum benefits (unlike Medicare, but that is another article), but the complexity of the system requires you to understand your benefits. You do not need to understand in the fullness of the law, but you should understand well enough to ask Social Security if you are entitled to something more. If you ask Social Security they will tell you, but in many instances if you do not ask, they will not.