Social Security FAQs, Answered

A A recent survey by the Nationwide Retirement Institute found that while about 54% of respondents said they knew exactly how to maximize Social Security benefits, only 6% were able to identify the factors that determine a maximum benefit. This strongly suggests that most people don’t know as much about Social Security as they think.

On Nationwide’s blog, Retirement Institute Vice President Doug Ewing answered some frequently asked questions from clients about Social Security.

Do social security benefits provide enough income to live on?

Generally, no. But the program was never intended to be a sole source of retirement income. When most people look at their essential monthly retirement expenses and compare them to their projected monthly Social Security benefits, they’re likely to find a significant discrepancy. Financial professionals can help clients get the most out of their benefits and close the retirement income gap.

When do you receive full Social Security benefits?

Full benefits are paid at full retirement age (FRA). For people born in 1954 or before, the FRA is 66. For people born between 1955 and 1959, the FRA increases by two months each year. FRA is 67 for people born in 1960 or later. Retirement benefits are reduced for those claiming them before FRA.

Can Social Security benefits be increased while waiting to claim them?

Yes. While waiting for FRA to guarantee that customers will receive all of their benefits, waiting beyond FRA can produce an even greater benefit. For each year a client waits beyond full retirement age to apply, their benefit increases by 8% of their full benefit. Someone with an FRA of 67 who waits until age 70 to claim would receive a 24% higher monthly check.

However, benefits stop increasing when the client turns 70, so make sure they don’t wait until they’re 70 to apply.

If Social Security benefits are claimed early, will they increase at full retirement age?

No. “The amount in effect when you apply for benefits, plus any subsequent cost-of-living increases, is the amount you will receive throughout your lifetime,” Ewing wrote. “That’s why your filing decision is so important.”

Will you receive less Social Security benefits if your spouse dies?

Yes. Married couples tend to receive two monthly Social Security checks. But if one of the spouses dies, the survivor receives the higher of these two checks. However, this means that the survivor receives less income from Social Security at the household level.

Can you fix a Social Security filing error?

If a client applies for Social Security early but changes their mind, it limits their options. In the first year after applying, they can withdraw their application, repay the benefits they received, and reapply later. When they reach full retirement age, they can suspend their allowance and benefit from a deferred retirement asset of 8% each year.

“At the end of the day, everyone’s situation is different when it comes to their retirement and Social Security planning,” Ewing told financial advisers. “As your client’s trusted financial professional, you can help them make the best decision for them by providing them with a basic level of knowledge about the program and showing them ways to optimize their deposit decision. “

Nationwide offers a suite of actively managed ETFs within stocks for financial advisors. These funds include National Nasdaq-100 Managed Income Risk ETF (NUSI)the S&P 500 National Managed Income Risk ETF (NSPI)the National Dow Jones Risk-Managed Income ETF (NDJI)and the National Russell 2000 Managed Income at Risk ETF (NTKI).

For more news, information and strategy, visit the Retirement Income Channel.

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