<&by1>By For the Monroe Journal
A recently released poll by Mass Mutual, released in April, concluded that 35 percent of near retirees could not pass a quiz on basic Social Security knowledge and another 18 percent earned a D. So this means that half of Americans ages 55 to 65 do not understand the programs basic rules and regulations. Would you allow your kids and grandkids to get these kind of grades? We don’t think so.
This poll consisted of 12 true/false questions. It was encouraging to know that 94 percent of the folks in this poll did realize that by drawing your benefit prior to Full Retirement Age (FRA) that benefits would be reduced, yet they did not know their own Full Retirement Age. Full Retirement Age is gradually rising from 66 to 67; the first phase of this increase began this year when people born in 1955 saw their FRA move to 66.2 months. This increase will continue in two-month increments until 2027 when it will be age 67.
Also noted in this poll was the lack of knowledge about Delayed Retirement Credits, Survivor Benefits and Earnings Limitations. These issues are all critical to developing the best plan for your retirement benefits. Delayed retirement credits do not continue past age 70, Survivor Benefits can be filed for in several different ways as they were not affected by the Bi-Partisan law change in 2015, and Earnings Limitations change each year, and specifically the year you turn Full Retirement Age. Confused? – you are not alone.
There are different ways to file depending on your age and your spouse’s age, ex-spouses age or deceased spouse’s age. It is your responsibility to become knowledgeable about these options but in all honesty, the Social Security Administration website makes it difficult. We agree the website is hard to navigate, hard to understand and as a result people give up their personal research and just file – what a sad and costly mistake.
Your SS statement gives you option at age 62 (the earliest you can file with costly reductions), your Full Retirement Age benefit amount and age 70. What about all the options in between – what if it is better for you to file at 67.4 months and your spouse to file at 63? What about ages 68 and 66.7? This is why a review is strongly recommended before filing. Don’t let these options fall through the cracks because they were not made available on your statement – you have many other options.
Making the wrong choice is not an exercise you want to participate in. It is not only costly but, in many cases, you cannot make a new choice because of rules and regulations. You do have a one-year window of opportunity to change your mind, called a Do-Over, but the caveat is that you have to pay back not only your benefits received to date, but all auxiliary benefits attached to your benefit – as we stated previously, costly.
ROY AND DIANE THOMPSON are both national Social Security advisors, and Roy is a former CPA of more than 40 years. You may contact them at firstname.lastname@example.org, on their website at www.pillarsllc.com or by calling (601) 954-0699.