The Blog


The E-Book

don't get madoffed







Financial Planning Newsletter• August 17, 2010 

Thinking Retirement?

Financial Planning Newsletter
August 2010

Social Security 101

Social Security is always a hot topic of conversation, this month we will discuss several important questions that come up routinely: spousal benefits, paying back your benefits and working while receiving benefits.

Social Security Spouse's and Survivors benefits:

Here are a couple of key rules regarding Spousal Benefits:

  • Have to be currently married to spouse whose benefits you are claiming off of.
  • The Spouse must be recieving his or her benefits for you to claim spousal benefits.
  • You must be at least age 62 to recieve
  • You can only get the full 50% spousal benefit if you are full retirement age

Here are a couple of key rules regarding Divorced Spousal Benefits:

  • Must have been married at least 10 years and not currently married.
  • Ex-spouse does not have to be recieving benefits for you to qualify for divorced spouse benefits.
  • You must be at least age 62 to recieve
  • You are entitled to 50% of Ex-spouses benefit amount if you are full retirement age

Here are a couple of key rules regarding Widow / Widower Benefits:

  • 10 year marriage rule applies.
  • Earliest age to receive is age 60 unless disabled.
  • Benefit depends on former spouses benefit amount and age of Widow/Widower but generally between 71.5% and 100% of deceased spouses benefit.
  • Have the option of taking own or deceased spouses benefit and switching at a later date to the higher benefit amount.

NOTE: Government Pension Offset applies to all the above categories. (meaning benefits can be reduced). Working while recieving may affect benefit amount as well.

Voluntary Withdrawal of Benefits form SSA521:

There has been much discussion lately about the secret loophole that allows you to get a higher monthly benefit from the Social Security Administration. In actuality it isn't a loophole at all and something they will gladly talk with you about. It's called Voluntary Withdrawal of Benefits and works like this:

  • You've reached retirement age and decide to begin collecting Social Security benefits. During this time you still are working and don't really need the SS money so you divert it to a savings account. At the age of 70 you decide to officially retire and begin thinking that if you had waited until now to apply for Social Security your benefit would be 32% larger than taking it at age 66.
  • The SSA has just the solution for you. They created the Voluntary Withdrawal of Benefits (form SSA 521) to allow you to repay your past benefits and then claim the higher monthly check going forward.
  • The rules are this: You must repay in 1 payment all the benefits received, but not any interest. That repayment consists of the entire gross amount (medicare deductions, tax withholdings, etc)
  • It's as simple as that. Well in reality you then will probably need to amend a few years of tax returns to get back some of the money paid and at the same time you will have to have been an exceptionally good saver, but it's available if you want to take advantage of it.

Additional Social Security info for you:

Currently, the full retirement age is 66 to get 100% benefits. If you take begin receiving at age 62 you reduce your FRA benefits by approximately 25%. If you wait until age 70 to take them you get approximately 132% of your age 66 benefits.

If you are born in 1960 or later your current Full Retirement Age is 67. (I wouldn't count on that to stay at that level)

Working while receiving benefits:

  • if under full retirement age any earnings over $14,160 will reduce your SS benefit $1 for every $2 over.
  • In the year you hit full retirement age any earnings over $37,680 will reduce your SS benefit $1 for every $3 over.
  • At Full Retirement Age or greater there is no restriction on earnings.


Feel free to email if you have a question on any of today's topics.

James A. Daniel,

This newsletter if for informational purposes only. The information contained within should not be considered as financial advice nor soliciation for financial services. Consult with your financial professional if you have any questions.

The Advisory Firm, LLC is a fee-only financial planning company and registered investment advisor.

© 2007 The Advisory Firm, LLC. All Rights Reserved.
12600 Deerfield Parkway, Suite 100 | Alpharetta, Georgia 30004

Visit our website The latest news Our Location About The Advisory Firm Contact The Advisory Firm