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Social Security may be a ‘treasure trove’ of wealth for your family


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You may have many questions regarding your retirement planning.

It may also lead to uncertainty about how you should invest and what the best method is for you to build the nest egg that you envision.

Chances are, you are overlooking potentially your biggest source of retirement funds — Social Security, writes Laurence Kotlikoff, an economics professor at Boston University, in his new book, “Money Magic: An Economist’s Secrets to More Money, Less Risk and a Better Life.”

For the rich, lifetime Social Security benefits will likely be their most important asset. It is the most important asset for people who have a high average life expectancy.

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You can maximise the amount you receive through the program by using the correct claiming strategies.

Kotlikoff has dedicated much of his professional life to education about Social Security. Economic Security Planning is a business Kotlikoff founded with the purpose of helping people find the best Social Security strategies for getting the maximum out of their wealth.

The author’s new book shows how people can get the best out of Social Security.

The bottom line is that “there are many methods to make your lifetime Social Security benefits a treasure chest,” he says.

It can cause you to be ignorant

You probably picture retirement benefits when you think about Social Security.

It may surprise you to know that there are thirteen different types of payment possible.

It also contains spousal, divorcing spousal, child in-care, and spousal benefit benefits.

This explains why 64 million Americans have received money through the program.

Each type of benefit has its specific requirements. It’s not a “use it or lose” system.

Kotlikoff wrote that if you do not request the benefit you are entitled to, it will be denied.

Sometimes it’s best to delay claiming.

It is sensible to wait until you are 70 in order to receive the greatest possible benefit. However, if you don’t reach that age you will be wasting your money. Social security may not make up six months of the time lost.

Social security retirement benefits are available to anyone over the age of 62. For every year you collect benefits before your full retirement age — generally 66 or 67, depending on the year in which you were born — you take a cut of about 7%.

You get 100 percent of your benefit if you retire at full retirement age. The benefits you receive increase about 8% each year you are older than full retirement age (up to 70).

Your retirement benefits will increase by 76% if you delay from age 62 until 70.

It is true that waiting to age 70 will not make financial sense, especially if your health conditions are severe or you can’t afford it.

The decisions you make will affect your entire family

Maximizing your family’s benefit is sometimes a higher priority than achieving the maximum amount you can for yourself.  

If you’re married to a person with disabilities, your claim for benefits can also be triggered by what is known as a Child-in-Care Spousal Benefit and a Disabled Child Benefit.

If you don’t wait for your monthly payments to grow, your family could lose the lifetime benefits they receive.

Kotlikoff says that while it might still be sensible to hold off until age 62 to receive benefits, it is not a good idea to do so at 70.

Social Security’s software has a major problem. It doesn’t treat the entire family unit.

Laurence Kotlikoff

Boston University economics professor and author

There are certain situations where waiting until 70 years old will bring you a greater benefit.

This will allow your spouse to receive more money on your death record.

Those payments — known as survivor benefits — enable a widow or widower to receive the full amount of their spouse’s monthly benefit (which may be their own retirement benefits plus excess survivor benefits if they have their own earnings toward Social Security).

Eligible for survivors benefits are ex-spouses who were married at least 10 years, and who wait until age 60 to remarry.

Notably, your claim does not affect the survivor advantage available to children under 22 or children who are disabled.

There are many strategies for Social Security claims. It is important to find the right strategy by using independent software.

Kotlikoff stated that the biggest problem with Social Security software was its inability to deal with the entire family unit.

“And what the husband is able to do will have an impact on what the wife’s can do,” he stated.

Here are some other tips

You can identify all benefits that you may be eligible for, and how they are available to you so you know where your money is going.

It is also important to act as your advocate. Kotlikoff says that different Social Security workers may have different answers. You can do your research and advocate for the amount you’re eligible for.

He said it’s important that you apply on-time for these benefits so you don’t lose any money.