Social Security Strategies: Getting the Most Bang for Your Buck

CFP Board Ambassador offers guidance on avoiding Social Security mistakes, maximizing retirement benefits

Washington, D.C., November 12, 2015 (PDF) – For many Americans, retirement is something to look forward to - a time to celebrate years of hard work, enjoy family and friends, and embark on new adventures. But filing for government retirement benefits can be daunting, and new Social Security rules recently signed into law as part of a larger federal budget bill promise to add to this complexity by eliminating two claim filing strategies: file-and-suspend and restricted applications for spousal benefits.

“Many don’t have a plan for claiming Social Security,” said Metro-Detroit CFP Ambassador Robert Schmansky, CFP®. “However, when to claim benefits is a very personal decision, and by not having a plan for when to claim benefits you really lack an overall retirement income plan, which not only seeks to maximize your financial resources, but also let you keep them by paying less in tax.”

A recent contribution to describes some of the most common mistakes that can keep people from maximizing their Social Security retirement benefits and how to avoid them, while accounting for changes introduced by the new law.

  • Filing at 62 because you need the income, but no longer working because your benefit will be reduced by the “Earnings Test”: Your benefits may be reduced based on the wages you earn after filing, but they will be repaid at full retirement age pro-ratably over your remaining life expectancy. Additionally, continuing to work can have the effect of increasing your annual benefit going forward.

  • Filing at 62 because you think you may die young: The “breakeven” age – when the gain from deferring benefits becomes higher than the gain from taking benefits early – is in the mid-80s for a single person. For married couples, however, there is a high probability that at least one person in the couple will make it into his or her 90s. Thus it generally makes sense for the high earner of the couple to delay benefits until age 70, since this increased benefit will determine what is paid to the longest-living spouse, either as a retirement benefit or a survivor benefit.

  • Taking benefits too early: You may be able to repay your benefits if you have been receiving them for less than a year and start them over later, at a date when they will no longer be subject to an early payment reduction. If you are now 66 or older, or will be 66 within six months of Nov. 2, you can suspend those reduced benefits upon reaching age 66, and let them accumulate delayed credits until age 70.

Don’t let Social Security filing become an overwhelming task that sours the start of a hard-earned retirement. Locate a CFP® professional near you who can guide you through the Social Security claims process and develop solutions that make the most financial sense for you.

ABOUT CFP BOARD The mission of Certified Financial Planner Board of Standards, Inc. is to benefit the public by granting the CFP® certification and upholding it as the recognized standard of excellence for competent and ethical personal financial planning. The Board of Directors, in furthering CFP Board’s mission, acts on behalf of the public, CFP® professionals and other stakeholders. CFP Board owns the certification marks CFP®, Certified Financial Planner™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements. CFP Board currently authorizes nearly 73,000 individuals to use these marks in the U.S.

CONTACT: Jessica Lewis, Communications Specialist P: 202-379-2256 E: Twitter: @cfpboardmedia


Robert Schmansky is the founder of Clear Financial Advisors of Metro-Detroit. Rob has over a decade of experience helping individuals and families meet their financial goals and overcome money concerns. He is frequently quoted in the media on issues regarding personal financial planning, and has been a contributing writer for U.S. News & World Report, Forbes and Yahoo!Finance, and an investment expert for FiLife, a former Dow Jones/IAC joint Internet venture. He has been an adjunct instructor of economics and the required courses for candidates to sit for the CFP® exam. Investment News selected Rob as a 2015 40 Under 40 financial planning professional and he is the 2013 PlanPlus Global Financial Planning Awards North American finalist.

CONTACT: Robert Schmansky, CFP® P: 248-677-1762 E: W: Twitter: @moneyclarity

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