Got a call last week from a couple that had just experienced a “pink slip”. After many years of faithful and aspiring employment, the husband’s contract was not renewed. At age 65 what do you do?
Well, he could go ahead and just draw his Social Security and his wife would continue employment as she is younger and enjoys her job. But he wants to continue working as he does not feel ready for retirement and feels he still has many good years of wisdom and experience to share.
We gathered some information from them both and started looking for options.
There is a special rule under the Earnings Limitations rule for the first year you retire if under Full Retirement Age. Social Security will pay you a full retirement check for any whole month you are considered retired, regardless of your yearly earnings. Our client had already earned more than the yearly earnings limit amount. This rule is complicated and has other guidelines, but this client qualified.
So, we were able to come up with a plan.
Client will file for SS starting in June.
Instead of taking any job, he will have the cushion of his Social Security earnings to allow him the time to find the right job.
When he finds a job, he will notify Social Security of his new position and SS checks will cease.
Then, if he has a new position, at Full Retirement Age, he will SUSPEND his Social Security benefits and allow them to grow at 8 percent per year (Delayed Retirement Credits) until his desired retirement age. You can voluntarily suspend your benefit any time after full retirement age prior to age 70.
If family members are drawing from your benefit and you suspend, their benefits will be suspended as well.
What did this accomplish? This gives our clients an income stream, while looking for new employment – not just any job, but the right job. Then when he is gainfully employed, he can suspend his benefit, take advantage of the 8 percent increase, and he can choose his next retirement date.
Does everyone qualify for this? NO. He was fortunate that all his numbers, as well as his birthdate and full retirement age fell into place. But, if you think you might qualify for this option, please seek out professional guidance and educate yourself on alternative moves regarding your Social Security benefits