Social Security Administration (SSA) benefits are a tool many New York residents need for financial stability as they get older. It’s a more complicated program than you may expect, however. Solely relying on the SSA for advice can cause major headaches and see you miss out on benefits you might not be aware you are eligible to receive.
Work With an Attorney to Avoid Costly Social Security Mistakes
Every client’s situation is different. Your age, marital status, family makeup, income, and overall health all play a role in your retirement and estate planning. That's why it is important to go over all the possible options with an elder law attorney who can help you maximize your benefits while avoiding common problems planning for retirement.
Keep in mind that info found online can be out of date as changes to Social Security take place over time. The minimum benefits age, maximum income levels, and total payout amount all see tweaks over the years. Working with a knowledgeable attorney means you will get the most up-to-date details to make informed decisions based on your unique circumstances.
Deciding When to Receive Benefits
One of the most crucial decisions to make regarding Social Security is picking the right time to apply for benefits. If you apply too early, the earnings test may see you missing out on benefits you would get if you applied later. Obviously, there are instances where you can’t wait for financial assistance, but in many cases, there’s a big advantage to holding off till a later age.
It may be odd to think about, but many seniors misjudge their own life expectancies. If you live longer than you expect and take benefits too early, you can end up receiving less than you’ll need.
If you’ve already started receiving Social Security payments, an attorney can help you change your benefits over time to potentially get more money. For example, you could receive higher payments through either a survivor’s benefit or retirement benefits from an ex-spouse. It’s also possible to withdraw your application and pay back benefits during the first year. In some cases, that can be advantageous as you can then re-apply in a few years and receive more for delaying your benefits.
Coordinating Benefits for Married Couples
Marriage plays a big role in Social Security, both while each spouse is living and also after one eventually passes away. It may not be a pleasant topic to plan around, but in most marriages, one spouse will significantly outlive the other.
If your partner dies, you will drop down to only a single benefit payment, but you will get the higher of the two benefits that were available. That means it can be helpful for the higher wage earner to wait longer to collect benefits so the surviving spouse receives more down the line. Depending on your ages, you may also be able to use the restricted application strategy to collect one spouse’s benefit while deferring the other and then obtain a larger amount in the future.
Remarrying can also dramatically impact your benefits, which is why your financial situation should be discussed with an attorney before tying the knot. Senior marriage may also interfere with other critical programs like Medicaid if you need coverage for a nursing home stay. In these cases, monetary considerations may overtake romantic aspirations.
Navigating Income Rules and Taxes
Besides age and marital status, you should also take into account how to balance earned income limit rules to maximize your benefits. You can still work while receiving Social Security, but the amount of income you make can end up reducing your payouts from the SSA.
Finally, don’t forget about planning ahead for taxes, as a portion of Social Security income is taxable. Higher-income seniors who are still working can see significant taxes on their benefits, which is another reason why it can be a better option to wait to collect benefits.
Talk to a Professional Before Making Any Financial Decisions
Are you starting to plan for a post-work life? With an attorney’s help, you can obtain peace of mind that you and your family will be taken care of when you retire. Contact us today and set up a free consultation so we can learn about your situation and find the best possible solutions.