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Dear Emmy, My husband and I are nearing retirement. I've heard that we can file for Social Security but delay receiving it. What's the benefit in this?

Deciding when to receive your Social Security benefits matters a great deal. By delaying your benefits for a few years, your monthly income can increase markedly. There are three factors that impact your benefit amount: your lifetime earnings, lifespan and the election date. The first two aspects are beyond your ability to substantially change, so choosing an appropriate election date is a crucial decision. The earliest age to begin receiving Social Security is 62. The latest, that affects the benefit amount, is 70. The monthly payout one can receive increases for every year benefits are deferred.

After both of you reach full retirement age, roughly 66 for folks born after 1943, you have the option to elect a limited benefit for a period of time then switch to a larger benefit in the future. This is called a 'switch strategy.' There are two aspects of switch strategies: 'restricted applications' & 'file and suspend.' After filing a Social Security application, you can turn around and voluntarily restrict or exclude certain benefits, allowing them to continue building delayed retirement credits. This could earn you more money down the road. But once you've filed, you may be eligible to receive the spousal benefit from your spouse's social security plan.

Spousal benefits are not available until the primary earner has filed for his or her own benefits. So for example, the higher earning spouse can file for benefits, then immediately suspend them to continue earning delayed credits. But in the meantime, the lower earning spouse can collect spousal benefits from the suspended plan right away. This can supply a modest income now, hopefully augmented by your individual retirement account income. Then at 70, the higher benefit amount can be activated. This can be especially helpful if you're concerned that your personal retirement savings may not stretch past a decade or more. As your IRA becomes depleted, the Social Security income can help make up the difference.

A single person can do a 'break even' analysis to determine whether to take early payments or wait. This is relatively straight forward. For married couples, choosing an election date can be more complex. Social Security offers two additional benefits for married people. As discussed above, spousal benefits provide your spouse with a smaller income after you claim you own. Additionally, there are survivor benefits, which provide your spouse with income after your death. Factoring in these aspects can be complicated and affects each family differently.

The Department of Labor has recently published an online resource called the Retirement Toolkit. This toolkit includes a list of publications and interactive tools to help with your retirement planning. Please make good use of this educational material at:

Securities and advisory services offered through NATIONAL PLANNING CORP (NPC) member FINRA, SIPC, a Registered Investment Adviser. EH Financial Group, Inc. and NPC are separate entities and unrelated companies. The information provided in this article is not intended to provide specific advice and shouldn't be construed as recommendations for any individual. To determine which strategy may be appropriate for you, please consult with a qualified professional.

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