The largest federal program in the U.S. is Social Security. Every month, around 66 million Americans get benefits, with payments totaling more than $1 trillion this year. Furthermore, another 182 million Americans currently work in positions covered by Social Security, implying that they’ll most likely get benefits in the future. Like many government programs, Social Security has intricate regulations and limitations that may make it difficult to comprehend. Here are three simple errors that may cost retirees and their spouses a lot. 1. Filing for Social Security retirement benefits too soon (or too late) The size of your monthly Social Security payment is determined by two factors: (1) your average earnings throughout your career’s three highest-paid years and (2) the age at which you claim benefits. Social Security eligibility starts at 62, even if you’re still working. However, you won’t be eligible for the full benefit, also referred to as the primary insurance amount (PIA), till you reach full retirement age (FRA). If you apply for Social Security before the FRA, you’ll face a permanent decrease in payments of up to 30%, though the actual reduction depends on when you receive your first check. The table below depicts the FRA for those born after 1942. 
Delaying Social Security beyond FRA, on the other hand, leads to a permanent boost in payments of 8% per year; however, these delayed retirement credits cease accruing at 70. In other words, retired employees may optimize their Social Security payments by deferring benefits until 70, but postponing any longer is pointless. 2. Misconception about Social Security spousal benefits The spouse of a retired worker may also qualify for Social Security payments based on that worker’s salary, but spousal benefits are calculated differently. Most significantly, spouses can get up to 50% of a retired worker’s PIA, although the amount spouses receive each month is determined by the age at which they apply for benefits. Again, eligibility begins at 62, and spousal payments, like those provided to retired employees, are permanently reduced if spouses collect Social Security earlier to FRA. However, in this case, there’s no credit for postponing benefits beyond FRA. That implies that nonworking spouses can increase their Social Security benefits by beginning benefits in the month they turn FRA. Waiting any longer makes no sense. Of course, only some have the luxury of waiting till FRA. 3. Failure to enroll in Medicare during the open enrollment period Medicare is a government-sponsored health insurance program for people aged 65 and over. Social Security recipients automatically enroll in Medicare Parts A and B, with coverage usually starting on the first day of the month when they reach 65. Seniors who haven’t yet claimed Social Security at 65 must fill out this Medicare application. In such case, your Initial Enrollment Period (IEP) starts three months before your 65th birthday and ends three months after your 65th birthday. For instance, if you turn 65 in June 2023, your IEP will be from the beginning of March 2023 till the end of September 2023. Medicare Part A is free for seniors who have paid Medicare taxes for at least ten years, while Part B requires a premium, which increases if you sign up late. If you miss your IEP, you’ll usually have to wait till the next General Enrollment Period, and you’d have to pay a 10% monthly late enrollment penalty (based on the regular Medicare Part B premium) for every full year you don’t sign up. To make matters worse, you must pay the penalty for the duration of your enrollment in Medicare Part B.
Contact Information:
Email: [email protected]
Phone: 8007794183
Bio:
For over 20 years, Jeff Boettcher has helped his clients grow and protect their retirement savings. “each time I work with my clients, I’m building their future, and there are few things that are more important to a family than a stable financial foundation.”Jeff is known for his ability to make the complex simple while helping navigate his clients through the challenges of making the right investment decisions. When asked what he is most passionate about professionally, his answer was true to character, “Helping my clients – I love being able to solve their problems. People are rightfully concerned about their retirement income, when they can retire, how to maximize their financial safety and future income.” Jeff started Bedrock Investment Advisors for clients who value a close working relationship with their advisors.A Michigan native, Jeff grew up playing sports throughout high school and into college. While Jeff is still an ‘aging’ athlete, Jeff will take more swings on the golf course than miles running these days. He creates family time, often with weekly excursions to play golf, a hobby he shares with his three young children.
Disclosure:
Investment Advisory Services are offered through BWM Advisory, LLC (BWM). BWM is registered as an investment advisor and only conducts business in states where it is properly registered or is excluded from registration requirements. We are currently either state or SEC-registered in the following states: Arizona, Florida, Illinois, Kansas, Louisiana, Michigan, New York, Oregon, Texas, and Washington. Registration is not an endorsement of the firm by securities regulators and does not mean the advisor has achieved a specific level of skill or ability. The firm is not engaged in the practice of law or accounting. Always consult an attorney or tax professional regarding your specific legal or tax situation.Although we make great efforts to ensure the accuracy of the information contained herein, we cannot guarantee all information is correct. Different types of investments involve higher and lower levels of risk. There is no guarantee that a specific investment or strategy will be suitable or profitable for an investor’s portfolio. There are no assurances that a portfolio will match or exceed any particular benchmark. Any comments regarding guarantees, safe and secure investments, guaranteed income streams, or similar refer only to fixed insurance and annuity products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claimsâ€paying ability of the issuing company and are not offered by BWM Advisory, LLC. Guaranteed lifetime income is available through annuitization or the purchase of an optional lifetime income rider, a benefit for which an annual premium is charged. Annuities are long-term products of the insurance industry designed for retirement income. They contain some limitations, including possible withdrawal charges and a market value adjustment that could affect contract values. Annuities are not FDIC-insured. Not affiliated with the U.S. Federal Government or any government Agency.
