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Things to Consider Before You Claim Social Security

31 Jul

Whether you want to leave work at 62, 67, or 72, claiming the retirement benefits you are entitled to by federal law is no casual decision. You will want to consider a few key factors first.

How long do you think you will live? While no one knows the answer to this question, some common sense considerations of overall health and family history can help guide you as you plan. If you have a feeling you will live into your nineties, for example, it may be better to claim later. If you start receiving Social Security benefits at or after Full Retirement Age (which varies from age 66 to 67 for those born in 1943 or later), your monthly benefit will be larger than if you had claimed at 62. If you file for benefits at FRA or later, chances are you probably a) worked into your mid-sixties, b) are in fairly good health, and c) have sizable retirement savings.1

If you really need retirement income, then claiming at or close to 62 might make more sense. If you have an average lifespan, you will, theoretically, receive the average amount of lifetime benefits regardless of when you claim them. Essentially, the choice comes down to more lifetime payments that are smaller versus fewer lifetime payments that are larger. For the record, Social Security’s actuaries project that the average 65-year-old man to live 84.0 years, and the average 65-year-old woman, 86.5 years.2

Will you keep working? You might not want to work too much after claiming, since earning too much income may result in your Social Security being withheld or taxed.

Prior to Full Retirement Age, your benefits may be lessened if your income tops certain limits. In 2018, if you are aged 62 to 65, receive Social Security, and have an income over $17,040, $1 of your benefits will be withheld for every $2. If you receive Social Security and turn 66 later this year, then $1 of your benefits will be withheld for every $3 that you earn above $45,360.3

Social Security income may also be taxed above the program’s “combined income” threshold. (“Combined income” = adjusted gross income + nontaxable interest + 50% of Social Security benefits.) Single filers who have combined incomes from $25,000 to $34,000 may have to pay federal income tax on up to 50% of their Social Security benefits, and that also applies to joint filers with combined incomes of $32,000 to $44,000. Single filers with combined incomes above $34,000 and joint filers whose combined incomes surpass $44,000 may have to pay federal income taxes on up to 85% of their Social Security benefits.3

When does your spouse want to file? Timing does matter, especially for two-income couples. If the lower-earning spouse collects Social Security benefits first, and then the higher-earning spouse collects them later, that may result in greater lifetime benefits for the household.4

Finally, how much in benefits might be coming your way? Visit SSA.gov to find out, and keep in mind that Social Security calculates your monthly benefit using a formula based on your 35 highest-earning years. If you have worked for less than 35 years, Social Security fills in the “blank years” with zeros. If you have, say, just 33 years of work experience, working another couple years might translate to a slightly higher Social Security income.1

A claiming decision may be one of the most significant financial decisions of your life. Your choices should be evaluated years in advance – with insight from the financial professional who has helped you plan for retirement.

At BrioWealth, we believe that financial planning should be done for the purpose of giving your life greater confidence, security and joy. That’s why we work closely with our clients to understand their personal goals and passions and build a plan around that. As retirement income specialists, BrioWealth helps our clients build wealth and create smart strategies for secure, sustainable retirement income. Call us at 877-606-1484 or visit http://www.briowealth.com to start creating your life enhancing financial plan!

Sources:

1 – MarketWatch.com, November 2, 2019

2 – SSA.gov, May 28, 2020

3 – BlackRock.com, May 28, 2020

4 – MarketWatch.com, November 11, 2019

This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

 

 

 

Social Media Life After Death

31 Oct

Most people realize the need to get their financial affairs in order before they die, but how many people think about what’s going to happen to their social media profiles? Do they live on or are those memories lost? When you or a loved one passes away, who can access that information or close an account on behalf of the deceased?

While it’s not surprising that the social media giants have policies for such circumstances, it is certainly not common knowledge amongst users. Here’s a quick guide to the policies of some of the major players.

Facebook adopted a policy of “memorializing” the pages of deceased users. If you pass away, your page won’t disappear – unless you or your loved ones decide that it should. Once memorialized, no one can log into it any further. The page is taken out of Facebook’s general search option, but the wall remains open for tribute postings by Facebook friends. In fact, only friends can see the profile/timeline.1

Memorialization isn’t the only choice available. An account can be taken down if “verified immediate family members” or executors request.

LinkedIn might memorialize your profile if you pass away. In its privacy notice, LinkedIn states: “If we learn that a User is deceased, we may memorialize the User’s account. In these cases we may restrict profile access, remove messaging functionality, and close an account if we receive a formal request from the User’s next of kin or other proper legal request to do so.” 2

Twitter takes a very thorough approach to deactivating accounts of deceased users. Executors or “verified immediate family members” must mail or fax requested documentation to its San Francisco headquarters.3

When a Twitter user dies, no heir, relative, friend or executor can log into the account – no one. Its policy states, “We are unable to provide login information for the account to anyone regardless of his or her relationship to the deceased.”3

Your digital assets can be managed after your passing according to YOUR wishes. Websites like Legacy Locker and DataInherit exist to help people safeguard and convey online data to heirs. Sites such as Great Goodbye, Great Respectance and 1,000memories serve as portals for last emails, last videos and posthumous online tributes.

Julie Newcomb, a Certified Financial Planner™ in Orange County, CA, specializes in financial planning for women.  As a wife, mom and business owner, Julie understands the pressures and challenges most women feel on a daily basis as they juggle many important priorities. Julie’s favorite thing about her job is the ability to give women peace of mind when they entrust her with their finances. To learn more about Julie Newcomb Financial, go to julienewcomb.com.

Sources:

1 – http://www.facebook.com/help/?page=185698814812082 [3/8/12]

2 – http://www.linkedin.com/static?key=privacy_policy [6/16/11]

3 – support.twitter.com/groups/33-report-a-violation/topics/148-policy-information/articles/87894-how-to-contact-twitter-about-a-deceased-user# [6/16/11]