1. A “Sweet Deal.” Take advantage of an obscure option allowing you to halt your current Social Security benefits, pay back all you have collected interest-free, and restart your benefits at a new, higher rate based on your current age. Your new monthly paycheck could be 75% larger than your previous benefit. First step? File Form 521 (available at www.ssa.gov). Don't be surprised that you have never heard of it. Out of the 32 million retirees collecting Social Security, only 71 people who had reached their normal retirement age or older took advantage of the option this fiscal year.
2. Tactics for Couples.
• When One Spouse Has Higher Earning Power. Under the Senior Citizens Freedom to Work Act of 2000, the higher-earning spouse (usually the husband) can file for HIS benefits, allowing his wife to collect her share of SPOUSAL benefits, and then suspend his own benefits while continuing to work, building a bigger payment for the future.
• When Couples Have Similar Incomes. Once you reach your normal retirement age, you can apply just for spousal benefits based on your husband's or wife's earnings record and delay the start of your own, higher Social Security benefits until later.
3. Take Care of the Kids. Children (up to age 18) of parents collecting Social Security can receive monthly payments based on the parent's retirement benefits. So, why not have Uncle Sam help foot the bill for your child’s education? Contribute the funds to a state-sponsored 529 college-savings plan and use the earnings and distributions tax-free to pay for tuition, books, fees and other qualified expenses."
The full article is available through this link.
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