You already know that Social Security is complicated and there are lots of rules. When you try to figure out those rules on your own, you can be swamped! We have tools that take advantage of all of the rules, and allow you to compare. so you can see how a scenario applies to a particular situation. While there may be thousands of rules, here are 5 that are important to know:
- The Primary Insurance Amount (PIA) is also called the full retirement benefit. It is the benefit amount that you receive at your full retirement age. It's also a snapshot in time: if a client continues to work and contribute to Social Security, the PIA (and, hence, benefits) will increase over time.
- The "deemed filing" or "deemed application" rule is important! This little-known rule states that,if you are not full retirement age and file for a spousal benefit, you are deemed to also be filing for your own benefit if eligible for one. Until you reach full retirement age, you cannot choose which to receive if you're eligible for both. Instead, you get the higher of the two---and you can't switch at a later date. This rule is coded in the software we use so that you won't get errant advice about filing before full retirement age.
- Both spouses cannot receive spousal benefits at one time. Only one spouse can be receiving a spousal benefit at any given time. There are some complex spousal switching strategies coded in our software, but it won't let both spouses collect spousal benefits at once.
- Spousal benefits will never be greater than 1/2 of the primarybeneficiary's full retirement benefit amount. Spousal benefits do not accrue delayed retirement credts. Bottom line: it never pays to wait beyond full retirement age to begin a spousal benefit if your are eligible to do so at full retirement age.
- You must be of full retirement age to file and suspend. This strategy is growing more common, but it is only an option if the client is full retirement age.
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