Protect Your Future Income

For all of us, protecting our online accounts should be high on our priority list.  The Social Security Administration has finally caught on and has tightened security in order to frustrate hackers and identity thieves.  Now, when you log into your Social Security Administration (SSA) account, you do what you’ve always done: give your user name and password.  Then you receive a security code sent by text message, and type in that code to complete your login procedure.  In the cyber-security trade, this is known as multi-factor authentication.

The result is better security, but it may be a big hassle for some users.  On the first day, Verizon customers weren’t getting their security codes; the problem has since been fixed.  Less technology-oriented Americans (and there are many) don’t use texting on their phones, which means they’ll either have to learn or do without their SSA account.  At the same time, multi-factor authentication doesn’t necessarily prevent cyber criminals from fraudulently creating an online account in your name or from siphoning away your benefits. Still, it's a step in the right direction.

Your response?  If you don’t already have an online account with the Social Security Administration, now would be a good time to open one, before a thief decides to do it for you.  (Here’s a direct link: https://secure.ssa.gov/RIL/SiView.do)  And if you aren’t into texting, now is a good time to become familiar with that feature of your smart phone.  If you’re having trouble, ask any teenager for some quick technical support. You may wonder why you waited so long to do so.

If you would like to review your current investment portfolio or discuss any other financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first.  If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch. We start with a specific assessment of your personal situation. There is no rush and no cookie-cutter approach. Each client is different, and so is your financial plan and investment objectives.

Source:

http://time.com/money/4434100/social-security-website-two-factor-authentication/?xid=tcoshare

The MoneyGeek thanks guest writer Bob Veres for his contribution to this post

Last Call for Social Security Benefits File-And-Suspend – April 29 2016

Last fall, the Bipartisan Budget Act of 2015 changed the rules to eliminate two popular Social Security claiming strategies for married couples: File-and-Suspend, and Restricted Application.

Who should be considering this?

Anyone who has at least met the full retirement age of 66, and is not yet age 70, should be considering whether to submit a file-and-suspend request by April 29.  If you or someone you know is within this age range, please share this article and be aware that you/they have a very short window to meet the deadline. Anyone who wants to be “grandfathered” under the old (current, and more favorable) rules has only one week left to complete their Social Security application and suspension request by the April 29 deadline!

What is File-and-Suspend?

On the surface, it seems too good to be true.  Let’s say you have a married couple, where (let’s say) the husband has earned higher yearly income than his wife.  That means he has contributed more to Social Security over his working life.  The husband files for Social Security benefits at full retirement age (currently age 66) and then immediately files to suspend those benefits.

As a result of this simple maneuver, the wife is now entitled to immediately receive Social Security spousal benefits equal to half of the husband’s full retirement benefits that were just suspended.  She would do this if 50% of the husband’s benefit is higher than she would have received if she had simply claimed her own Social Security payments.

Because he suspended his benefits, the husband can continue working, and wait until age 70 to start receiving Social Security checks in his own name.  Why would he do that?  Because each year of deferral allows him to accumulate more credits—effectively raising his monthly benefits 8% a year, which is considerably higher than the inflation rate.  At that time, the wife would stop claiming the husband’s benefits and start receiving her own Social Security checks.  If she was working at the time, she might have raised the amount she could claim under her own name.

Presto!  More money now, more money later.

The original rationale behind the file and suspend strategy was to encourage more seniors to continue working.  The rationale behind ending it is that it was becoming a drain on the Social Security system.  Moreover, Congress was looking for money to offset a huge increase in Medicare Part B premiums for individuals not yet receiving Social Security payments.

Notably, the tactic is a moot point for anyone who has already claimed benefits, or who doesn’t plan to delay benefits going forward. Nor is file-and-suspend relevant for widows (who don’t need file-and-suspend to coordinate between retirement and survivor benefits), nor for divorcees (who rely on the Restricted Application strategy instead, which remains available after April 29 for anyone who was born in 1953 or prior).

Nonetheless, for married couples (and some parents with children) who are in the age 66-70 window and have not yet claimed their benefits, but where one person could activate a spousal or dependent child benefit for someone else while delaying their own benefit, only a small time window remains to submit a File-and-Suspend request before the rules are changed forever! And arguably, anyone who is single and doesn’t care about spousal benefits, but simply wants to preserve the right to “undo” and reinstate their delay decision in the next few years, may want to consider submitting a request to File-and-Suspend by April 29 as well!

If you or someone you know wishes to inquire or apply for this benefit, you should visit www.ssa.gov or call your local social security office.

If you would like to discuss your social security benefits situation or any other financial planning matters, please don’t hesitate to contact us or visit our website at http://www.ydfs.com. We are a fee-only fiduciary financial planning firm that always puts your interests first.  If you are not a client yet, an initial consultation is complimentary and there is never any pressure or hidden sales pitch.

Sources:
http://www.csmonitor.com/Business/Saving-Money/2015/1102/Social-Security-This-strategy-to-maximize-benefits-may-soon-disappear

http://www.dailylocal.com/business/20151102/colliton-budget-plan-ends-social-security-file-and-suspend

The MoneyGeek thanks guest writers Michael Kitces and Bob Veres for their contributions to this post.