A New Social Security Benefit Strategy for Singles




Filing and Suspending is a New Way to Maximize Benefits for Singles


When I present ways to maximize Social Security retirement benefits, I always feel badly for singles. It seems that the only maximization strategy for singles is to determine the optimum time to retire. Thanks to Kurt Czarnowski, a former Social Security Representative, there is a new maximization strategy for singles.

Let’s say that you are single with a full-retirement-age (FRA) of 66 and you plan on working until you are 70 years old. Kurt Czarnowski suggests that when you reach FRA you file for Social Security benefits and suspend your application. This will allow you to accrue delayed-retirement-credits (DRCs) until you actually retire at 70. (DRCs are about 8 percent per year.  If you work until 70, you can increase your FRA, you will increase your benefits by 32 percent.)

The advantage of filing and suspending at FRA is this. If for some reason you need to claim Social Security before 70 you can claim benefits all the way back to your FRA. In other words, you can claim up to four years of benefits. If you do not file and suspend, and claim benefits before 70 you can only claim benefits for the previous six-months after FRA.

Thank you Kurt Czarnowski for a great claiming strategy for singles!

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Early Social Security Retirement GAO Study Results

Retirement Road Sign with blue sky and clouds.


Applying for Social Security Benefits at the Right Time

Applying for Social Security benefits at the “right time” has always been an important personal finance strategy. Estimates indicate that many American do not apply for Social Security at the right time. Many people apply for early Social Security retirement benefits leaving about $120,000 of lifetime benefits on the table. Each year this adds up to $25 billion that could have been collected by retirees. This prompted the Government Accounting Office (www.gao.gov) to gain a better understanding of the circumstances faced by those who claim early Social Security retirement benefits.

The GAO Study provides several new insights about what makes people apply for early retirement Social Security benefits:

  1. Physically-demanding blue collar jobs may influence when someone claims Social Security benefits. According to the recent GAO study (http://www.gao.gov/products/GAO-14-311) individuals in physically-demanding blue collar jobs were 55 percent more likely to claim benefits prior to full retirement age (FRA) compared to those in all other occupations after controlling for other factors. See Figure 1.0 for details.
  2. Individuals who are out of the workforce for an extended time period of time or had longer work histories often take early Social Security retirement benefits. According to the GAO study (http://www.gao.gov/products/GAO-14-311) people who are out of the work force for a prolonged time, had long work histories or expected a shorter longevity (such as not living past age 75) are likely to claim Social Security benefits early.

The GAO study goes on to investigate what makes individuals apply late for Social Security retirement benefits

  1. Those who claim delayed retirement credits (DRCs). According to the GAO (http://www.gao.gov/products/GAO-14-311) people who wait to claim Social Security retirement benefits tend to have a higher income (about 45 percent after claiming benefits) than those who claimed early, and 33 percent higher at age 72. Additionally, for both early and delayed claimants, Social Security benefits accounted for an increasing share of total income as they aged.
  2. How the Affordable Care Act affects early retirees: According to the GAO study (http://www.gao.gov/products/GAO-14-311) “In 2014, some early claimers, especially those without access to health coverage, may benefit from certain provisions of the Patient Protection and Affordable Care Act (PPACA) intended to improve the availability and affordability of health coverage. GAO estimates that nearly a million early claimers did not have government or employer-sponsored health insurance before 2014. Of these, 14 percent may be newly eligible for Medicaid in 2014 due to expansion in 25 states and the District of Columbia and 58 percent could be eligible for tax credits that reduce the premiums for coverage purchased through the new health insurance exchanges. However, GAO estimates that 10 percent of these early claimers had incomes below the federal poverty level but lived in states that did not expand Medicaid and had incomes too low for federal exchange tax credits.”

To sum it up, those that take early Social Security retirement often need Social Security to supplement their income due being out of the work force for an extended period of time, physically unable to keep up the work tempo or faced with longevity issues. One a positive note, the Affordable Care Act allows individuals to take early retirement with greater health security. For those in good health and / in occupations that allow them to work until 70, they will gain a 32 percent increase in the amount they would have received if they had retired at FRA. (Compared to a 25 percent decrease in the FRA benefit, if the claimant takes early retirement at age 62.) There is one thing that is common to early, FRA and delayed Social Security retirees, as these individuals increase in age Social Security retirement benefits will account for an increasing share of their total income.

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Threat of Cutting Your Social Security Benefits is Eased

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The Danger of Using the “Chained” CPI to Calculate Benefits is Off the Table for Now

The debate to switch to a “Chained Consumer Price Index” (Chained CPI) to determine Social Security Cost-of-Living Adjustments (COLAs) has recently eased. According to the Center for Economic and Policy Research (www.cepr.net) using the Chained CPI will result in cuts to already modest Social Security benefits, not truly be an accurate measure of the inflation rate seen by seniors, and lead to income tax increases for working Americans.

Defining CPI-U (Chained CPI)

The Chained CPI is calculated by the Bureau of Labor Statistics (BLS) and is the Consumer Price Index (CPI) to gauge inflation by measuring changes in the prices of goods and services that Americans purchase each month (for more information please see www.bls.gov/cpi/cpisupqa.htm). The nickname for this CPI is CPI-U and it is often used for income tax calculations

Defining CPI-W

Social Security claimants receive annual cost-of-living increases based on the Consumer Price Index for Urban Wage Earners and Clerical Workers. COLAs ensure that benefits keep up with inflation. For more information see www.ssa.gov/OACT/STATS/cpiw.html. The nickname for this CPI is CPI-W and it is often used to determine the annual change in Social Security and veterans benefits. .

How Chained CPI will Reduce Your Monthly Social Security Benefit

The Social Security Administration (SSA) estimates that the average annual benefit in 2013 was $15,528 (www.ssa.gov/pressoffice/basicfact.htm ). This modest benefit will take a direct hit if the SSA changes to the Chained CPI.

The CEPR calculates that if the SSA were to use the Chained CPI (see www.socialsecurity.gov/retirementpolicy/projections/summary.html for details) over time this would result in substantial cuts in benefits and a three percent benefit reduction after 10-years. 

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Save this Date and Meet the Author



Meet the Author

Kathleen Sindell, Ph.D. will be featured in the DC Library Monthly Author Talks on Saturday, June 7, 2014, 10:00 to 12:00 AM ET at the West End Neighborhood Library, 1101 24th Street, NW. Washington, DC  20037 (202-724-8698).  Here is your opportunity to meet the author of “Social Security: Maximize your Benefits” and enjoy a FREE informative presentation about Social Security claiming strategies.

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Social Security Tax Season Reminders




It’s Not Too Late for a Little Tax Planning


Tax season is right around the corner. Here are some Social Security tax tips from the Social Security Administration (SSA) that may help you.

  • If your total income, including Social Security, is $25,000 as an individual or $32,000 as a couple filing jointly, you’ll need to pay tax on some of your benefits.
  • If you get Social Security and don’t receive your 1099 from us by the end of January, request one at www. ssa. gov/1099.
  • Have children? Your child needs a Social Security Number to be claimed on your tax return. Learn more about getting one at www.ssa. gov/ssnumber.
  • You’ll want to let Social Security know if you changed your name in the past year, due to marriage, divorce, or any other reason.
  • Check your W-2s and tax paperwork to make sure your name and Social Security number are correct.
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You, Social Security, and the Affordable Care Act

The Affordable Care Act can have a major impact of when you retire and claim Social Security benefits. As you plan your retirement budget, you’ll need to consider medical insurance and health care costs. For many older Americans next to housing, healthcare related costs are the largest expense.

Many individuals will pay lower health insurance premiums due to the amount of their Modified Adjusted Gross Income (MAGI). This creates a new strategy for maximizing Social Security benefits. By not taking early Social Security retirement benefits you can often significantly lower your MAGI and qualify for lower health care premiums.

Here is an example of how this works for a Silver Plan:

Couple age 62, MAGI of $60,000, non-tobacco users:

  • Household income in 2014: 387 percent of the poverty level
  • Unsubsidized medical insurance premium in 2014: $14,567
  • Receives a government tax credit subsidy of up to: $8,867 (about 61 percent of the medical insurance premium)
  • Net amount of 2014 premium $5,700

Same couple, age 62 MAGI of $63,000, non-tobacco users:

  • Household income in 2014: 406 percent of the poverty level
  • Unsubsidized medical insurance premium in 2014: $14,567
  • Eligibility for subsidy: No
  • Net amount of 2014 premium $14,567

In other words, if this couple increases their income by just $3,000 annually they will lose the subsidy and pay $8,867 more per year (that’s $739 per month)  for medical insurance. This is a good reason to wait until you are eligible for Medicare, then take Social Security.

Calculating Where You Stand

The MAGI is generally your adjusted gross income plus any tax-exempt Social Security, Social Security Disability (but not SSI), interest or foreign income. Once you have determined your estimated 2014 household income and household size refer to the chart below from www.healthcare.gov.

Choose the column for your household size. The column on the left shows income levels that qualify for lower costs on premiums and out-of-pocket costs for private health insurance, and for low-cost health care through Medicaid. Additionally, there is an online calculator at the Kaiser Foundation Web site located at http://kff.org/interactive/subsidy-calculator/ .


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Access your Social Security Benefit Verification Letter Online

stacked mail
Need a Proof of Income Letter Quickly?
It has been my experience, that from time to time I need to provide proof of my husband’s Social Security benefits. The Social Security Administration (SSA) provides a Letter of Verification for Social Security benefits, supplemental Security income, and /or Medicare online by using my Social Security Account at https://secure.ssa.gov/RIL/SiView.do
New users must be able to verify some information about yourself and:
• Have a valid E-mail address,
• Have a Social Security number,
• Have a U.S. mailing address, and
• Be at least 18 years of age.
You can create an account only to gain access to your own personal information. You cannot use this online service to access the records of a person:
• With whom you have a business relationship;
• For whom you are a representative payee; or
• For whom you are an appointed representative.
Unauthorized use of this service may subject you to criminal or civil penalties, or both.
 To set up or use your account to get a benefit verification letter, go to Sign in or create an account at https://secure.ssa.gov/RIL/SiView.do. You can view, print, and save your benefit verification letter. The benefit verification letter is also called a budget letter, benefit letter, proof-of-income letter, or proof of award letter.
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Using Family Social Security Benefits to Fund Your Early Retirement

Grandfather Helping Teen


Social Security “Two-for-One”


When you start receiving Social Security retirement benefits, some members of your family may also qualify to receive benefits on your record. If they qualify, your spouse or child may receive a monthly payment of up to one-half of your full-retirement age (FRA) benefit amount. These payments will not decrease your retirement benefit. In fact, the value of the benefits your family may receive, added to your own, may help you decide if taking your benefits sooner may be more advantageous.

Eligibility Rules for Children

The following information about eligibility is a quote from the Social Security Administration (SSA) Web site. (For details please see http://www.socialsecurity.gov/pubs/EN-05-10085.pdf )

When you qualify for Social Security retirement benefits, your children may also qualify to receive benefits on your record. Your eligible child can be your biological child, adopted child or stepchild. A dependent grandchild may also qualify. To receive benefits, the child must:

  • be unmarried; and
  • be under age 18; or
  • be 18-19 years old and a full-time student (no higher than grade 12); or
  • be 18 or older and disabled from a disability that started before age 22.

Normally, benefits stop when children reach age 18 unless they are disabled. However, if the child is still a full-time student at a secondary (or elementary) school at age 18, benefits will continue until the child graduates or until two months after the child becomes age 19, whichever is first.

 Comparing Early versus FRA Social Security Benefit Retirement Strategies

As stated earlier, benefits paid for your child will not decrease your retirement benefit. In fact, the value of the benefits he or she may receive, added to your own, may help you decide if taking early retirement may be more advantageous. The following two scenarios illustrate this concept:

Scenario #1

A 62 year-old single parent with a 14-year old child with a FRA of 66 and monthly FRA benefit of $1,000. If this single parent retires at 62 he or she can collect $750 per month and the child can collect 50 percent of the FRA benefit of $500 for a total of $1,250. The $1,250 can be collected for four-years until the child is 18.

Scenario #2

A 62 year old single parent with a 14-year old child with a FRA of 66 and monthly FRA benefit of $1,000 waits until FRA to begin benefits.

Deciding Which Social Security Strategy is Best

The break-even age of Scenario #1 and Scenario #2 is 78. Therefore if the single parent does not expect to live beyond age 78 (due to health problems or other issues) he or she should take advantage of Scenario #1 and collect the the child’s benefit for four years.

The SSA states that it is important to keep in mind that there is a Family Maximum. The total varies, but generally the total amount you and your family can receive is about 150 to 180 percent of your FRA benefit. For more information about the Family Maximum amount see an earlier blog at http://kathleensindell.com/blog-writing/excerpt-from-social-security-maximize-your-benefits-9 .

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Six Speedy Ways to Increase Your Social Security Benefits (Part 2 of 2)

Increase social security benefits



Make it Easy on Yourself with These Quick Tips


This is the second part of a two part series on quick ways to increase your Social Security benefits. If you are adverse to using complex planning scenarios or computer programs this series provides six quick strategies to increase your monthly Social Security benefits. After seeing which Social Security Benefit strategy works best, you may want to compare strategies or fine tune your approach by using a Social Security Calculator at http://www.socialsecurity.gov/retire2/AnypiaApplet.html.

4. Wait Longer to Apply for Social Security Benefits

Social Security benefits are increased by a certain percentage (depending on date of birth) if you delay claiming your retirement benefits beyond Full-Retirement Age (FRA). The chart below indicates the yearly and monthly rate of increase by year of birth. For example, If you were born in 1948, your FRA is 66. If you work until 70 you will receive 32 percent more than your base FRA benefit. That is, let say your FRA benefit is  $1,000 your do not apply for benefits until age 70. You FRA benefit with Delayed Retirement Credits (DRCs) will be $1,320 per month [$1,000 + (4 X 8 percent = 32 percent X $1,00)] = $1,320.

Increase for Delayed Retirement

Year of Birth*

Yearly Rate of Increase

Monthly Rate of Increase



11/24 of 1%



1/2 of 1%



13/24 of 1%



7/12 of 1%



5/8 of 1%

1943 or later


2/3 of 1%

Note: If you were born on January 1st, you should refer to the rate of increase for the previous year.

The benefit increase is not compounded and increases no long apply after the age of 70, even if you continue to delay taking benefits. If you’ve already reached full-retirement age, you can choose to start receiving benefits before the month you apply. However, the Social Security Administration cannot pay retroactive benefits for any month before you reached FRA or more than 6-months in the past.

Here’s An Important Point: If you decide to delay your retirement, be sure to enroll in Medicate at age 65. For more information see www.ssa.gov/retire2/justmedicare.htm. If you do not enroll, your Medicate coverage may be delayed and cost more.

5. Take advantage of Spousal Benefits with File and Suspend

If you and your current spouse are FRA, one of you can apply for retirement benefits now and have the payments suspended, while the other applies only for spousal benefits (for more information see http://www.socialsecurity.gov/retire2/yourspouse.htm#a0=1). This approach allows for both individuals to delay receiving retirement benefits on their own earnings records and paves the way for both individuals to receive Delayed Retirement Credits (see above for details).

If you are already entitled to benefits you can Suspend current or future retirement benefit payments up to age 70 beginning the month after the month when you made the request. (Remember, the SSA pays benefits the month after they are due.) You do not have to sign your request to Suspend benefits, you can ask the SSA orally or in writing. (However, I would make certain you have a receipt of your request. You want to make certain that you will receive your DRCs.)

Let’s stay that you started to receive benefits less than 12-months ago and you changed your mind about when you want to start benefits. You can withdraw your Social Security Claim (called Reset Your Application) For details see  http://www.ssa.gov/retire2/withdrawal.htm . Keep in mind that this is a one time action and you will have to repay all the benefits you and your family received based on your retirement application.

6. Use Your Taxable Assets First

Some folks pay taxes on their Social Security benefits. Claimants pay taxes on their total income (investment earnings, pension payouts, wages, tax-exempt interest and half of their Social Security income). To reduce your tax liability remember that Roth IRAs are not counted as taxable income.  Withdrawals from 401(k), 403(b), IRAs and other tax-deferred accounts are included as taxable income. There may be real advantages to using your taxable accounts before you apply for Social Security benefits. This will allow those non-taxable accounts (like Roth IRAs) to increase in value.

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Six Quick Ways to Maximize Your Social Security Benefits

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Innovative Strategies to Increase Your Social Security Benefits (Part 1 of 2)

This is the first of a two part series on quick ways to increase your Social Security benefits. If you are adverse to using complex planning scenarios or computer programs this series provides six quick strategies to increase your monthly Social Security benefits.  After seeing what works best, you may want to compare strategies or fine tune your approach by using a Social Security Calculator at http://www.socialsecurity.gov/retire2/AnypiaApplet.html

1.      Increase Your Social Security Benefits by Working 35-Years

Retirement Age is when you begin receiving Social Security benefits. Your Stop Work Age is the age you are when you leave the work force. Your retirement benefit is based on your highest 35-years of earnings and your age when you begin benefits. If you stop work before retirement age the Social Security Administration (SSA) will use zero (0) for each year without earnings when they calculate your benefits. Additionally, some of your 35-years may be low-earnings years, those low earning years will be averaged in, creating a lower benefit than if you had continued to work.

SOLUTION: If you have low earning or zero earning years in your earnings record, you may want to work before you retire to give your benefits an extra bump.

2.      Don’t Take Early Retirement

If your Full-Retirement Age (FRA) is 66 and you retire at 62 your benefits will be permanently reduced by 25 percent. Additionally, if you are forced to go back to work,  your benefits will be reduced by $1 for every $2 you earn over $15,480 in 2014.

SOLUTION: Bite the bullet. There are many regional, state and federal programs that can assist you during your four-year FRA  “waiting” period. For example, the State of Illinois has a 32-page guide titled the, “State & Federal Programs for Older Americans 2013” located at http://www.state.il.us/aging/1news_pubs/publications/state-federal_book.pdf. This guide is designed to assist older Americans in need and includes sources of financial assistance for energy, tax relief, food, and health care.

3.      Collect Your Extra Credit Social Security Benefit Dollars for Military Service

According to the SSA under certain conditions special extra earnings credits are granted for periods of active duty or active duty for training. Special extra earnings credits are not granted for inactive duty training. For example, if  your active military service occurred:

  • From 1957 through 1967, the SSA will add the extra credits to your record when you apply for Social Security benefits.
  • From 1968 through 2001, you do not need to do anything to receive these extra credits. The credits were automatically added to your record.
  • After 2001, there are no special extra earnings credits for military service.

Note: According to the SSA in January 2002, Public Law 107-117, the Defense Appropriations Act, stopped the special extra earnings that have been credited to military service personnel. Military service in calendar year 2002 and future years no longer qualifies for these special extra earnings credits

SOLUTION:  The SSA provides the following guidelines for claiming extra credit for military service:

  • The information that follows applies only to active duty military service in 1957 through 1977,  you are credited with $300 in additional earnings for each calendar quarter in which you received active duty basic pay.
  • Active military service in 1978 through 2001 for every $300 in active duty basic pay, you are credited with an additional $100 in earnings up to a maximum of $1,200 per year. If you enlisted after September 7, 1980, and didn’t complete at least 24 months of active duty or your full tour, you may not be able to receive the additional earnings. Check with Social Security for details at www.ssa.gov.
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