Emily Guy Birken - Making Social Security Work for You: Advice, Strategies, and Timelines That Can Maximize Your Benefits

Avon, Massachusetts

Copyright 2016 by F+W Media, Inc.

All rights reserved.

This book, or parts thereof, may not be reproduced in any form without permission from the publisher; exceptions are made for brief excerpts used in published reviews.

Published by

Adams Media, a division of F+W Media, Inc.

57 Littlefield Street, Avon, MA 02322. U.S.A.

www.adamsmedia.com

ISBN 10: 1-4405-9337-X

ISBN 13: 978-1-4405-9337-6

eISBN 10: 1-4405-9338-8

eISBN 13: 978-1-4405-9338-3

Library of Congress Cataloging-in-Publication Data

Birken, Emily Guy, author.

Making social security work for you: advice, strategies, and

timelines that can maximize your benefits / Emily Guy Birken.

Avon, MA: Adams Media, 2016.

Includes bibliographical references and index.

LCCN 2015049946 (print) | LCCN 2016009188 (ebook) | ISBN

9781440593376 (pb) | ISBN 144059337X (pb) | ISBN

9781440593383 (ebook) | ISBN 1440593388 (ebook)

LCSH: Social security. | Retirement--Planning. | Finance, Personal.

| BISAC: BUSINESS & ECONOMICS / Personal Finance / Retirement Planning. |

BUSINESS & ECONOMICS / Personal Finance / Budgeting. | BUSINESS &

ECONOMICS / Personal Finance / Money Management.

LCC HD7091 .B557 2016 (print) | LCC HD7091 (ebook) | DDC

368.4/300973--dc23

LC record available at http://lccn.loc.gov/2015049946

Many of the designations used by manufacturers and sellers to distinguish their products are claimed as trademarks. Where those designations appear in this book and F+W Media, Inc. was aware of a trademark claim, the designations have been printed with initial capital letters.

Cover images almoond/123RF.

This is for Ari and James, my two favorite mensches. And Im not just saying that because you will eventually choose my nursing home.

This book could not have come to be without the help of several kind and knowledgeable friends and experts:

Id like to thank my editors Peter Archer and Jackie Musser. Thank you for again entrusting me with your vision. Lets hope my on-time record continues to improve.

A big thank you to Social Security expert Devin Carroll for double-checking my understanding of Social Security arcana. I love that you love to talk about Social Security.

I also need to thank Joe Saul-Sehy for introducing me to Devin, and for being such an unfailing advocate of my work. Theres no one Id rather discuss zombie apocalypse financial planning with.

Jim Blankenship provided me with unexpected help and a great deal of humor. You have no idea how much I appreciated your gift of A Social Security Owners Manual. It was like suddenly receiving well-explained cheat codesand they were funny!

Thanks to my family for listening to me yammer on about Social Security, with a particular hat tip to my husband Jayme. Im glad that after twelve years together, we can still find new and unexpected ways to bore each other to tears. Im thinking I now owe you a trip to some sort of museum of esoteric engineering.

How do you plan to pay for your retirement?

If youre like the average fifty-to-sixty-something American, you have just over $103,000 set aside for retirement. Thats hardly enough to live on, especially if youre destined to have Al Roker wish you a happy century on The Today Show.

For most Americans, that leaves Social Security benefits to make up the difference. In fact, Social Security benefits are the chief source of income for the majority of the elderly, representing at least half of the retirement income for 74 percent of single beneficiaries and 52 percent of married couples. Clearly, maximizing Social Security benefits is an important part of retirement planning for most Americans.

The simplest method for maximizing benefits is to wait until you are older to start receiving them. The longer you wait, the more you will receive each year. Beneficiaries receive approximately 8 percent more for each year that they wait between the early retirement age of sixty-two and the maximum age of seventy. However, very few retirees can afford such a wait, which is why it is so important for beneficiaries to understand their claiming options. Navigating the complex Social Security system and its labyrinth of obscure rules to get the most from its benefits is beyond both the patience and skills of the average senior. As a result, many Americans who rely on Social Security as their chief source of income receive an amount that is smaller than it should be. This book will help you to determine how to get the most out of your Social Security benefits.

But is it true that future retirees will be able to count on Social Security? If you pay attention to the national conversation on Social Security, it often sounds as if the program is circling the drainand that anyone younger than current retirement age is foolish to count on those benefits, let alone plan on maximizing them. The truth is that Social Security was set up so that it can be changed as the needs of our government and citizens change, but it is a stable program and it is here to stay. But it was not designed to be anyones entire retirement income.

What is the average American to do? Saving more for retirement is certainly in order, and there are plenty of books (including my own The 5 Years Before You Retire and Choose Your Retirement, ahem) that can help you grow your nest egg.

But whether you have yet to save a solitary penny or you have several million dollars set aside for retirement, understanding Social Securityeverything from where it stands financially to how the program works to what you can expect from your benefits to Congresss recent changes to the programis a necessary part of your retirement planning. This is especially true if you anticipate that you will be among the 22 percent of married couples and 47 percent of single elderly Americans who rely on Social Security benefits for 90 percent or more of their income.

Over the next eleven chapters, I will guide you through the inner workings of Social Security, from its past to its future, so that you can make the best decisions about your benefits. Rather than rely on confusing and contradictory information spouted from a variety of sources, be it your know-it-all neighbor, the talking heads on TV, or even the representatives at your local Social Security office, you can use this book to gain a better understanding of your options. By the end of this book, you should feel confident in your ability to navigate the Social Security system through just about any retirement scenario.

This book is set up to give you a full overview of Social Security, including its beginnings during the Great Depression, the legitimate concerns over its future, the myriad strategies for taking your benefits, and the common problems and pitfalls that affect beneficiaries and their income. To help you understand the alphabet soup of arcane Social Security terminology, you can consult the glossary at the end of the book. Each term will also be defined as we come to it.

Though the book is intended to be a full examination of Social Security that you can read from cover to cover, you may instead choose to read a chapter here and there depending on the specific circumstances and questions that crop up in your journey to becoming a Social Security beneficiary. The book is broken into three parts: