Editor's note: The folks in Washington, D.C. are in the business of false promises and selling fear so they can collect huge amounts of money from people like you. Washington calls the money it takes "taxes." And most Americans just pay up. After all, they're being "taken care of." And Dr. David Eifrig wants you to end this sort of thinking.
Today's edition of our weekend Masters Series is adapted from a recent Retirement Millionaire special report. In it, "Doc" shows you how to turn the tables on Washington and start making your retirement benefit YOU... instead of the government.
If you weren't aware that you may be eligible to increase the amount of money you receive from Social Security in retirement, you'll want to keep reading...
Two Simple Strategies for Maximizing Your Social Security Income
By Dr. David Eifrig, editor, Retirement Millionaire
Claim Some Now... and More Later
With this strategy, you and your spouse can start receiving Social Security benefits as soon as you are eligible. Then, using something known as the "Spouse Benefits" provision, you can claim a lot more money a few years later.
Kiplinger columnist Mary Beth Franklin estimates this strategy can boost your income from Social Security by more than 30%.
Before we show you exactly how it works, you need to understand two things:
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1.The longer you wait to collect, the more you will receive every month.
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| 2.Your spouse can collect 50% benefits based on your work record. |
Most people assume when they retire, they'll be collecting benefits based on their own work history. However, the government also offers "spouse benefits," which entitle you to collect a monthly check... worth up to 50% of whatever your spouse is collecting.
| • | First, one member of the couple (let's say the wife) files for benefits as soon as she is eligible. Right now, that's at age 62. |
| • | Simultaneously, the husband files for spousal benefits at 50% of hers. The husband does NOT file for his benefits when he is eligible... Instead, he waits to reach full retirement age (say 66). He delays filing for his own 100% benefits. The longer he waits to file, the more his benefits will be worth. |
| • | Once the husband's benefits are maximized, he files for his own benefits. The wife is then able to "step up" her benefits to the higher payout. (She can collect her benefits plus file for the spouse benefits... up to the total amount that her husband collects.) |
Here again: The wife files and the husband gets a spouse benefit. Then a few years down the road, the husband files and the wife gets a spouse benefit.
It sounds a little confusing, we know, but it's definitely worth crunching the numbers.
This is the secret Timothy Westcott and his wife Marilyn, from Minnesota, used. Marilyn wanted to collect Social Security as soon as she was eligible, but Timothy wanted to keep working until he was 70. So Marilyn filed for benefits... When Timothy realized how the system works, he filed to get "spouse benefits," worth 50% of what Marilyn collects.
As Timothy told Kiplinger's...
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Timothy and Marilyn added an extra $700 a month to their income... that's $8,400 a year.
When Timothy reaches age 70, he'll file for his own benefits. Marilyn will get Timothy's spouse benefits. And they'll collect an even higher payout.
What's also good is if Timothy dies first, his wife will get a much bigger benefit than she would have received if they'd both started collecting their Social Security as soon as they became eligible.
According to a report from the Boston College Center for Retirement Research, titled Strange But True: Claim Social Security Now, Claim More Later, typically, the higher wage-earner should collect "spouse benefits" when eligible... and delay his or her own benefits to let the payout build up.
Assuming the wife was the lower wage-earner, the way to maximize their total benefits would be to have the wife claim benefits at 62 and the husband delay until 69.
And as an added bonus, the spouse receiving spousal benefits can receive a check for up to six months of retroactive benefits... but the claim can only be filed after the recipient is 66 years old. Social Security won't pay retroactive benefits if you're younger than 66.
This means you can add another six months of payments (at 50% of the benefit) to your income. Just tell the Social Security representative you want to apply for retroactive benefits.
Does this strategy work for you?
You must be married. At least one of you must be healthy enough to delay claiming benefits until age 69. And both spouses must have an earnings history. The Boston College study found that the higher and more equal your earnings, the more you have to gain.
One thing to keep in mind: If you start collecting Social Security or spouse benefits before you turn 66, you're locking in a permanently lower percentage for your spouse benefits.
WHAT TO DO: If the numbers make sense, call the Social Security Administration's (SSA) toll-free number: 800-772-1213. Set up an appointment with a representative at your local Social Security office. Have them work through the possibilities with you, and take advantage of this extra money. To prepare for your visit, I recommend you read the SSA's site on how to apply for spouse's benefits – http://www.socialsecurity.gov/forms/ssa-2.html.
The $1,068-a-Month Family Boost
Right now, according to a recent report, more than 500,000 Americans are taking advantage of a little-known provision in the Social Security system that enables certain retirees with children to add as much as $1,068 per month to their Social Security benefits.
For example, Alabama resident David McManus is cashing in on this strategy... When the 69-year-old teacher learned about the specifics of this opportunity, he went to his local Social Security office and was soon collecting an extra $1,068 per month, plus $40,000 in retroactive benefits.
He estimates his family will receive a total of $250,000 in the years to come. McManus said this money is "almost too good to be true."
Here's how it works...
If you or your spouse is eligible for Social Security and you are caring for a child or grandchild, you could begin collecting benefits of $1,000 per month or more in your child's name.
The money must be used for your child... but this is a great way to pay for college or other big expenses.
According to Lita Epstein in The Complete Idiot's Guide to Social Security and Medicare, your child could be eligible whether he's biological, adopted, or a stepchild. A dependent grandchild may also qualify in some circumstances.
Your child can collect benefits until age 18... or until age 19 if he is a full-time student (no higher than 12th grade).
And according to Epstein: If you have reached full retirement age (66), your spouse may also be able to collect a 50% "spouse benefit," no matter what his or her age, if they are caring for a child under the age of 16.
So if you are retired and have young children, you could qualify for an extra chunk of money for both your spouse and your child.
WHAT TO DO: If you're receiving Social Security and have a child in your care, call the SSA's toll-free number: 800-772-1213. Set up an appointment with a representative at your local Social Security office. To prepare for your appointment, look over Form SSA-4 (the form to apply for child's benefits) here – http://www.socialsecurity.gov/forms/ssa-4.html.
Here's to our health, wealth, and a great retirement,
Dr. David Eifrig
Editor's note: Remember, this is YOUR money. You paid into the system and deserve to get as much of your money back from Social Security as you can. Fortunately, there are several 100% legal ways to do this... you just have to know how.
To learn about the different rules, techniques, and strategies to increase your lifetime Social Security benefits – and potentially collect an extra $200,000 or more over the course of your retirement – click here.