Social Security Tips You Probably Didn’t Know About!

Social Security is one of the most complicated subjects we will deal with as we get ready to retire. Are you sure what your benefits will be when you retire?

This article shares three little-known opportunities to receive additional benefits if you qualify.

Are you married to someone receiving benefits? Do you have young children? Have you lost your spouse? Are you thinking about going back to work after retiring early but are afraid your Social Security check will take a big hit? You may be in for some good news.

There are more than 2,700 separate rules governing Social Security. If you find it complicated and confusing, it’s no surprise. How do you navigate through the jungle of rules?

Should you file early at age 62 or wait until you are full retirement age? What about those people who wait until they are 70? How do I figure all that out before I choose to retire?

If you want information about basic Social Security benefits and how to set up your own account, please see my book, Do You Know What it Takes?.

Now, let’s jump into three situations that fall outside normal Social Security considerations.

Working After You Retire With Early Benefits

You probably know if you claim Social Security retirement benefits before reaching full retirement age (for most Baby Boomers this is age 66), you will receive a permanent reduction of your benefits. What you may not know is if you go back to work or continue working after claiming your reduced benefits, there will be an assessed penalty. This means your benefits will be reduced further. BUT, you will not lose those benefits forever.

Let’s look at an example. Daniel retires at the age of 62 and claims a reduced Social Security benefit. He will receive $1000 per month instead of $1333 which he would have earned if he had worked another four years, until his full retirement age. But he realizes he needs additional income each month, so he continues to work, pocketing the $1000 per month from Social Security as well as his salary. However, once he reaches the published limit of $17,640 (it can change annually, so be sure you know what that amount is), there is a change in Daniel’s Social Security payment. He will have $1.00 in Social Security benefits withheld for every $2.00 he earns (or 50%) withheld. In other words, his Social Security benefit will be $500 per month instead of $1000 after he makes more than $17640.00 for the year.

However, the reduced benefits will eventually be paid back to Daniel after he reaches his full retirement age. His monthly payment will be larger than it was when he was working. That’s the good news. The bad news is he won’t receive the payback in a lump sum, but rather over a number of years, maybe as many as 15 years. Eventually, he will recoup all the funds originally withheld.

Young Children and Your Spouse Can Also Collect Social Security

Children can receive money from Social Security if a family breadwinner dies or becomes disabled. You may not have known your child can receive benefits even if you filed for Social Security earlier than your full retirement age.

We will continue to use our example of Daniel, who filed for benefits at age 62. He dies suddenly at the age of 64. His child Alana (age 10) and his spouse, Jessica (age 45), can both receive Social Security benefits. The benefits for Jessica and Alana are based on what Daniel’s full retirement benefit ($1333) would have been, and they are are eligible to receive up to $667 each.

They may not receive that entire amount if their benefits combined is a certain percentage above the husband’s monthly benefit. The percentage is usually between 150% and 180% of his monthly benefit. However, they would still be eligible for some benefits.

The usual rules for children still apply, though. As long as Alana is under the age of 18,not married and still Jessica’s dependent, she will continue to receive her father’s retirement benefit. If she is still in high school, when she graduates or two months after she turns 19 (whichever comes first) her Social Security benefits will end.

Jessica’s benefits end when Alana turns 16.

Widows and Widowers Can Still Receive Payments

There are rules here, too. We know Jessica can begin collecting Daniel’s survivor benefits after he dies.

If she gets remarried after the age of 60, she can continue to collect his Social Security benefit even after the new marriage.

There are many, many rules within the Social Security guidelines, which affect these situations. It is up to you to check on the rules and ensure you and your loved ones receive all the benefits to which they are entitled. Don’t leave money on the table if you qualify. It could amount to hundreds or thousands of dollars over yours or your child’s lifetime.

For basic Social Security information, please check out my book, Do You Know What it Takes?. This book explores ways you can maximize your pre-retirement savings and how to plan for your BEST retirement. It also walks you through setting up your own Social Security account.

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