Going Green: the Financial Gains of a Sustainable Home

Reducing your carbon footprint isn’t just good for your family or the planet.
Learn how you can reduce your carbon footprint and shrink home expenses…

Reducing your carbon footprint isn’t just good for you, your family and the planet, it’s good for your long term cash flow and expenses. Find out how to save the planet and some money.

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An Agile Approach to Financial Health

Creating financial health and wellness can be daunting and exhausting. Approaching your financial wellness with agile strategies used for successful software development can give you the insight and motivation you need to realize habits and behaviors that promote financial wellness and build the resources and wealth for more security, control and life satisfaction.

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Preparing for the Unforeseen: Disability Insurance and Emergency Funds

Financial Planning for Uncertain Times

Gain a better understanding of disability insurance protections, unemployment insurance benefits and emergency funds and learn how to ensure you and your family safely navigate calamities, challenges or disasters in uncertain financial times.

Emergency Funds and Insurance

Working professionals, anyone with a family, a home or any net worth worry about the future. Layoffs, illness, accidents, catastrophes, national debt ceilings or the potential collapse of social security, it’s enough to cause sleepless nights for even the most accomplished or secure individual. And, life isn’t trending to be any easier for anyone.

While we can’t predict the future, we can prepare for calamity. We’re not talking about a bunker with canned goods and bottled water. It’s not doomsday prepping. We are talking about a few financial steps you can take which will see your family through any unforeseen disaster.

Outlining how you can prepare for layoffs and illness or injury that prevents you from working, we’ll offer guidance to get you started and perhaps a little motivation. We’ll also explore the differences between disability insurance, unemployment insurance and your emergency fund or rainy day fund and how you might use a strategy incorporating all three for an affordable sense of assurance for you and your family in the event of a crisis.

With recent discussions around the failing of the social security trust after 2035, these strategies might also be prudent for those nearing retirement, or those whose retirement saving strategies might be less than adequate.

Finally, we’ll explore how the expertise of a skilled financial planner can help. With their insights, you can find a solid grasp of your financial situation, understand your insurance coverages and create an invaluable emergency fund as you prepare for the future.

Disability Insurance

Disability insurance, as the name suggests, provides financial assurance if illness or non-work injury keeps you from working or results in excessive time off or job loss. The distinction between disability insurance and worker’s compensation insurance is important to point out as worker’s compensation benefits apply only to on-the-job injuries. Disability insurance covers qualifying injury or illness sustained outside of work. Directly work-related injuries are most often covered by worker’s compensation policies and not disability insurance.

Disability insurance policies provide a percentage of your income to you for a fixed period, or until you can return to work or secure another job. Employers may offer disability coverage as part of an employee benefits package, which is selected and administered by the employer, or you have the option for privately funded coverage which you can obtain and manage yourself. A few states require companies to provide short-term disability coverage to employees, either through a private carrier or state sponsored plan.

The two most common types of disability insurance available are short-term disability insurance and long-term. While both policy types may have specific limits or maximum benefits, short-term benefits cover temporary disabilities and provide income replacement of 60-70% of an employee’s disability income for a period of, often, up to six months. Long term disability extends this coverage somewhat, covering somewhere between 40-60% of pre-disability income.

Prices for disability insurance vary, based on policy terms, an individual’s age, health or occupation. In the case of employee provided coverage, the insurance may be wholly or partially subsidized by the employer. Major carriers offer various pricing structures, so if you are opting for privately funded or supplemental disability insurance, it’s wise to obtain quotes from several carriers, comparing coverage options, pricing, policy terms and features or riders.

Independent insurance agents, brokers and some financial advisors can help navigate pricing and policies to find coverage which will reasonably and adequately protect you and your family should you suffer a disabling event. Cost for disability coverage does vary for the reasons mentioned and for features provided. Disability insurance premiums generally range from 1% to 3% of an individual’s annual income.

The key advantage of privately funded disability insurance is portability. Employee coverage can change or be discontinued, for any reason, by an employer, leaving you with gaps or an absence of coverage. In the event you are fired or laid off, you may have the option to convert your plan to an individual policy but are again subject to the employer’s discretion and policy options. Private policies, by comparison, offer continuity and stability as coverage is maintained as long as premiums are paid.

Tax implications for both employee funded and privately sourced disability insurance will also vary. If an employer pays the disability insurance premium, in part or in full, the benefits received are generally considered taxable income. In contrast, if privately funded disability insurance premiums are paid with after-tax dollars, the benefits received in the event of a qualifying event are typically tax-free. Remember, this tax benefit relates directly to the dollars used to cover premiums; if you use pre-tax dollars like a flexible spending account or cafeteria plan, you may be liable for taxes on received benefits.

Disability insurance premiums may be deductible as a business expense on your state and federal income tax returns, reducing your overall taxable income. It is important to understand the specific terms and conditions of your policy coverage as well as regulations and laws guided taxable income in your state. A qualified accountant or financial advisor can provide more details as it pertains to federal and state tax codes for disability insurance premiums.

A few other less common disability insurance coverage options are also available, including:

  • High-Limit Coverages for individuals with high incomes
  • Own-occupation coverage protecting an individual’s ability to work in one’s specific occupation
  • Business Overhead Expense Insurance to cover ongoing business expenses for small businesses and the self-employed; and
  • Key Person Disability Insurance designed to protect businesses and organizations from the financial impacts of disabilities or incidents affecting key personnel.

When considering any type of disability insurance as a supplement to your disaster preparedness strategy, it’s wise to consult with a specialized disability insurance broker, a financial planner or investment manager who knows your financial situation and can advise on the types of coverage you might purchase to provide adequate protection for your specific needs and assets without overpaying.

Unemployment Insurance

Now, let’s get into unemployment insurance. Many of us got familiar with jobless benefits or unemployment insurance during the pandemic. Or, we may have, at a point in our career trajectory, contacted the unemployment insurance office in our home state. It is widely known and discussed how ridiculously inadequate unemployment benefits are in the context of personal expenses.

Before the pandemic (January 2020), weekly benefits were replacing less than half of average wages. In some states benefits topped out at less than $275 per week – equal to less than $7 an hour. According to research by the Economic Policy Institute domestic unemployment insurance benefits in the United States were among the shortest term and reached the least number of unemployed workers anywhere in the developed world. In the absence of federal standards, individual states also dictate a maximum benefit duration, 26 weeks in most states, which falls well below international norms. The National Employment Law Project found that, as of 2020, 10 states were providing fewer than 26 weeks of benefits with two states offering as few as 12 weeks. In several of those states, fewer than one in six workers were able to claim even that short span of benefits. Washington State, for example, maintains a maximum benefit (of this writing) of $999 per week, for a maximum duration of 26 weeks, with potential extensions triggered during periods of high unemployment. State-funded benefits in Oregon, for example, are available for up to 26 weeks with the maximum weekly benefit, as of this writing, being $783 per week.

Compare those benefits and duration potential against your mortgage, gas, groceries and other expenses and see how far that might get you today. Even with careful financial planning, budget adherence and a strictly ramen diet, the maximum benefit from Washington State won’t come close to meeting average monthly expenses without a supplement, considering the monthly mortgage payment for a “typical” Seattle home, according to a 2022 Redfin report, was $5,133, up from $3,525 in October of 2021 and well before the recent spate of interest rate hikes.

With the average length of a job search in 2023 taking anywhere from 5 to 7 months, twelve to twenty-six (or even twenty-eight) weeks of unemployment assistance benefits will assuredly deplete resources, tap your savings and stress your finances even in the best of unprepared scenarios. Private or supplemental unemployment relief insurance can be an option although coverage isn’t widely available and often requires very specific eligibility criteria. So, financial planning, preparedness and budget strategies all make good sense, with diligent and calculated savings for the creation and sustainable, inflationary maintenance of an emergency fund.

Emergency Funds

The Financial Industry Regulatory Authority (FINRA) estimates that just 46% of Americans have three months of living expenses set aside for a rainy-day or emergency fund. Setting aside resources to cover unexpected expenses or income disruptions is critical for continual peace of mind and the assurance that your family is protected from the unforeseen. A financial buffer or emergency fund supports you in the event of more than just job loss. Natural disasters, major home repairs and other calamities can also keep you from working, or can require significant out-of-pocket costs, which might otherwise need to be paid with credit cards, personal loans or other forms of high-interest debt. Emergency funds also help maintain your long range investment strategies, allowing you to meet expenses without having to liquidate or reallocate assets.

Building an emergency fund lets you avoid relying on credit cards, consumer credit or loans to cover immediate expenses like housing, utilities, groceries and transportation. Financial planning specialists recommend anywhere from three to six months of living expenses saved for an emergency fund. These expenses are, of course, unique and personal to your situation. Ideally, you’ll start with a financial plan, estimate your overall monthly expenses and create a budget. Get a big-picture perspective of your overall expenses. Identify in the plan where you can reduce spending to reallocate funds to emergency savings. Once you’ve detailed your expenses and budget, consider setting up automatic transfers from your checking account to your designated emergency fund account. Look for additional opportunities to fund this account, like the allocation of tax refunds and bonuses or reallocating discretionary income towards the fund.

Your emergency fund should be accessible and liquid. While a savings account can have a significantly lower yield than other investments, the funds are immediately available, generally low-risk and, if saved in a bank or other established financial institution, protected by the Federal Deposit Insurance Corporation (FDIC). Other options for relatively liquid assets with slightly higher interest rates, include certificates of deposit (CDs) or in some cases timed U.S. Treasury bills. A skilled financial planner can help you time the CDs or Treasury bills in a “laddered” approach and might have additional ideas for low-risk, liquid asset allocations. Consulting with a planner to maximize your disaster planning efforts, resource and investment management is a prudent idea.

Prepare with a Financial Planner

We know that unemployment or job loss insurance can be inadequate. We also know that in uncertain times with volatile job markets we need some protection for potential job loss and disaster. Disability insurance works to protect us if we’re injured and unable to work, but how do we coordinate this and create a sufficient emergency fund? We can budget, plan and allocate on our own. We can also enlist the help and support of a qualified financial planner.

Financial planners are a terrific resource for more than just investment management. When it comes to planning, budgets and resource allocation, a skilled planner provides perspective. They can also uncover opportunities for saving, guiding you in building financial strategies that support a rainy day fund while maintaining the quality of life you value and enjoy.

Many financial planners, in addition to operating as fiduciaries, are also licensed to sell insurance in their home states. Insurance licensure and insights into insurance policy structures, premiums and requirements lend you a unique advantage when shopping for disability insurance policies or other insurance coverage. With knowledge of your personal assets and obligations, a skilled financial planner and advisor will ensure you have adequate coverage for your specific financial situation without paying out too much in premiums. It’s a fine balance at times, seeing that your insurance will protect you fully when the time comes. You can’t always count on an insurance broker as they often receive commission for selling particular policies regardless of whether they’re a fit for you. When you can, it makes sense to consult the expertise and insights of your financial planner when shopping for policies. Their insights may prove invaluable.

Experience Disaster Financial Preparedness

“Those who fail to prepare,” as the old saying goes, “prepare to fail.” As professionals, providers, caregivers, employers or parents, our business and families count on us to plan accordingly. We simply can’t fail. Planning for emergencies with a safety net fund will ensure that, even with state unemployment benefits, you can weather any layoff or downturn in the job market. Adequate disability insurance benefits will also provide a degree of assurance in the event of injury or accident.

It doesn’t take a whole lot of effort to ensure you’re protected for a rainy day. It does get a whole lot easier enlisting the objective insights of a financial planning professional. In any event, while we don’t know what the future holds, we can sleep better knowing that we can and are prepared for the unexpected, protecting our loved ones with a little budgeting, planning and preparedness.

Northern Lights Advisors is a fiduciary, fee-only Registered Investment Advisor (RIA) firm based in Seattle, Washington. The information in this article is not intended as tax, accounting, or legal advice. Read the full disclosure here.

Understanding Social Security

How to ace one of your biggest financial decisions

Social security is one of the finest achievements of the US government in the 20th century. It has served and continues to serve as a significant income source for retirees throughout the country. A recent survey indicates that roughly 57% of retired Americans consider social security as a considerable source of income. Additionally, it is estimated that approximately 90% of the current retirees and 83% of non-retirees rely on social security to provide at least some assistance during retirement.

These figures are a clear indication that America relies on social security during retirement; however, there is a huge fundamental problem with this ongoing trend.  According to the Social Security Administration, the average social security amount after the cost-of-living-adjustments was $1,461 in January 2019. Social security was never built to serve as a major source of income; instead, it was supposed to provide financial assistance to the aging population. The growing reliance on social security would leave retirees financially stressed during retirement.

For people ready to retire over the next couple of years, it is critical to understand the intricacies of social security and how they can maximize their monthly benefits. This guide intends to inform the readers about the basics of social security, strategies to boost their payouts, and different factors that affect their benefits.


Understanding the basics of social security

What is it?

Social security is a retirement benefit given to retirees who paid social security taxes during their employment. Ida May Fuller was the first recipient of monthly social security benefits in 1940. An individual should reach at least the qualified retirement age to start receiving benefits, applicable to deductions, and full-retirement age to receive full benefits.

How do you qualify for social security?

In order to qualify for social security benefits, you must earn enough credits throughout your employment history. The good news is that you only require 40 credits or approximately ten years of employment history to qualify for social security benefits.

How do you earn credits for social security?

Your earning should be more than $1,360 in 2019 to receive one social security credit or more than $5,440 to earn four credits annually. It is critical to understand that one can earn a maximum of four credits in any given year irrespective of his income level.

How does the government calculate social security benefits?

The Social Security Administration takes your earnings history into account for calculating your social security benefits. It is a three-step process:

–       The SSA adjusts your earnings in proportion to any historical changes in the US wages. It takes your 35 best or highest-paid years into account for calculation. After that, it identifies your average indexed monthly earnings (AIME).

–       After identifying your AIME, the SSA applies a social security formula to this figure to determine your monthly social security benefits. For 2019, this formula considers 90% of your first $926 out of the AIME; then it takes 32% of the amount between $926 and $5,583 as per your AIME; and lastly, it takes 15% of any remaining amount over $5,583. The SSA adds all of these figures to arrive at your full retirement benefit estimate. This is the amount you are qualified to receive after the full retirement age (FRA).

–       Under the last step, the SSA reduces your full-retirement benefit by up to 25% if you claim social security at age 62, whereas it adds approximately 8% for every year you delay your benefits after the qualified retirement age, 66 or 67 years, up to 70 years.

Note: If a worker has an employment history of fewer than 35 years, the SSA credits the worker with zero earnings for vacant or unemployed years. Additionally, social security benefits are calculated every year and adjusted for inflation as well as the cost of living adjustments.


Disappearing strategies to boost social security

File and suspend strategy

Under the file and suspend strategy, a worker could file for benefits at FRA and then immediately suspend them. This simple action would trigger social security benefits for a spouse or any other qualifying family member. At the same time, the benefits of the worker would continue to accrue until 70 years, growing up to 32%. There is a provision to collect lump sum benefits for the suspended years, although it would forfeit any of their delayed retirement credits.

Restricted claims for spousal benefits

Under the restricted claims for spousal benefits strategy, a married or eligible divorced spouse can collect half of their partner’s benefits after reaching FRA, while their retirement benefits continue to grow until 70 years.

Why these strategies are going away

The Bipartisan Budget Act of 2015 ended or at least limited the benefits of each of these strategies. As per the act, the file and suspend strategy is only applicable to workers who applied the strategy prior to April 29, 2016. Similarly, the restricted claims for spouse benefits strategy is now available for spouses who were born before or on January 1, 1954, provided they have already reached FRA. The regulations for widows/widowers or dependent children under the restricted claims for spouse benefits are different and will be discussed in the coming sections.


Social security rules for married couples, widows/widowers, and disabled beneficiaries

Married couples

Social security regulations favor married couples. A married spouse can file for both spousal benefits and survivor’s benefits. Spousal benefits allow a non-working spouse or one with low earnings history to claim half of their spouse’s social security benefits. A spouse can file these benefits starting at age 62 with some reductions, though they can wait until FRA to receive the full benefit amount. In the case of survivor’s benefits, the surviving spouse can claim benefits as early as 60 years, but there will be reductions as per the SSA guidelines. The other option is to wait until FRA to avoid reductions.

In the case of two-earner married couples, the survivor would receive the higher of either his own benefits or the benefits of the deceased. For couples born before January 1, 1954, restricted claims for spousal benefits is an option.

Tip: In the case of married couples, it makes sense to maximize the benefits of the higher earner by claiming them at age 70. It will ensure that the survivor receives higher social security benefits in case the higher-earning partner passes away.

Widows or widowers

Social security rules for widows or widowers are slightly complicated. They vary depending upon four factors, including the primary insurance amount (PIA) of the deceased at the time of FRA, whether the deceased reached FRA, the age of the survivor, whether the deceased started social security benefits.

Deceased spouse had filed for benefits

If the deceased spouse started benefits at 62 or before reaching FRA, the surviving spouse would get the higher of the benefits received by the deceased spouse or 82.5% of their net benefits. The survivor can start receiving reduced benefits starting at age 60 or wait until FRA to receive full benefits. If the deceased spouse claimed benefits after reaching FRA, the survivor would receive the same benefits as that of the deceased.

Note: If both spouses receive benefits, the survivor would get the higher of his or the deceased spouse’s benefits.

Deceased spouse hadn’t filed for benefits

In the case that the deceased spouse didn’t reach FRA, the survivor would receive 100% of the PIA of the deceased spouse, provided they reached FRA. If the survivor claims spousal benefits before FRA, the benefits will be reduced as per the social security reduction rules. If the deceased passed away after reaching FRA or older age, the survivor would receive 100% of the benefits of their former spouse, along with any additional delayed retirement credits, subject to reduction if the survivor didn’t reach FRA.

Disability benefits

Social security disability (SSDI) benefits are designed for workers who can no longer work or perform the work they did prior to their disability. It is critical to understand that the SSA has strict eligibility criteria for disability benefits. The average disability benefits as of January 1, 2019, stood at $1,234 per month.


Impact of divorce on social security

If you got a divorce but didn’t remarry until age 60, the chances are that you might qualify for spousal benefits on your ex’s record. However, don’t celebrate just now as you still need to meet the SSA’s eligibility criteria. Let’s go over the list:

  • You must have been married to your previous spouse for at least ten years.
  • You should reach age 62 to collect spousal benefits if your ex-spouse is alive. However, if you were born before January 1, 1954, you can wait until you reach FRA, and then file a restricted application for spousal benefits. In the meanwhile, you can let your own retirement benefits grow until you reach 70, thereby accruing delayed retirement credits of up to 32%.
  • In case your ex-spouse has reached retirement age but hasn’t applied for benefits, you can still apply for spousal benefits, provided you qualify other criteria. You must be divorced for at least two years to claim spousal benefits.
  • If your ex-spouse is deceased, you can apply for spousal benefits once you reach the qualified retirement age. However, if you’re taking care of a child you had with your ex-spouse who is under 16 years of age or is disabled, you can start receiving benefits earlier.
  • If your previous spouse is deceased and you remarry after age 60, you might qualify for spousal benefits.


Public employees and social security norms

If you worked in the public sector- city administration, state government or federal government- and receive retirement benefits in addition to social security benefits, your benefits, as well as spousal benefits, are subjected to the Windfall Elimination Provision and Government Pension Offset rule.

Windfall Elimination Provision

Under the Windfall Elimination Provision, WEP, the SSA will reduce your social security benefits by half of your other non-covered government pension. So, if your net social security benefits were $2,000, and you received $800 through a non-covered public pension system, your net social security benefits will be $1,600. The total reduction cannot exceed $463 in 2019.

If you are someone who has worked in a private capacity, before or after your government service, for at least 30 years (earning more than “Substantial income”) and has paid social security taxes, you might be able to avoid this provision.

Government Pension Offset

The Government Pension Offset (GPO) rule applies to the primary recipients, spousal benefits, survivor benefits, or the benefits received by ex-spouses. Under the GPO rule, the SSA reduces the social security benefits of the filer by up to two-thirds of the government income received by the individual. For instance, if you receive $1,200 through your non-covered public pension system, your social security benefits will be reduced by $800. For someone qualifying for social security benefits worth $1,000, they’ll receive only $200 after the GPO deduction.

Note: The WEP and GPO apply differently to active-duty or inactive-duty military personnel. Read more about it here.


How kids receive social security benefits

The Social Security Administration distributed $2.6 billion every month in social security benefits to more than 4.2 million children during 2017. Social security is a critical source of nourishment for the most vulnerable segment of the society, children. The SSA provides social security benefits to children in case of death, disability, or retirement of their parents/guardians. In order to receive social security benefits, a child must satisfy the following criteria.

  • The child must have a retired or disabled parent who is eligible for social security benefits. Social security benefits are provided to children whose parents/guardians passed away after working long enough in a job to receive social security benefits.
  • The child must be unmarried and below 18 years of age; 19 years if the child is a full-time high school student.
  • Social security benefits are extended to disabled children over the age of 18 years provided the disability began before attaining 22 years of age.


New do-over strategy to maximize benefits

Social security rules are confusing, and it’s quite often that people regret drawing their benefits early, especially those who claim reduced benefits before reaching FRA. The good news is that the SSA allows such individuals to opt for a do-over strategy, provided they satisfy certain conditions.

If you are planning for a do-over for your social security benefits, you must:

  • Withdraw your claim application within the first 12 months of claiming benefits.
  • Repay the benefits you or your spouse or family received during this period.

In case you claimed benefits before reaching FRA but want to stop benefits until age 70, the SSA allows you to suspend benefits without making any repayments. Your benefits will accrue the 8% annual delayed retirement credits, though your base for calculation would be lower because of early distributions. You can reinstate benefits at any time before reaching age 70 or wait for automatic reinstatement once you reach 70 years.

For instance, if you applied for benefits at age 62 but would like to stop them at FRA, between the age of 66 and 67, you can apply for a suspension and let your retirement benefits grow 8% annually. If your benefits were 75% at FRA because of an early withdrawal, your benefits could still grow up to 99% of your full-retirement benefits through this strategy.

It is critical to understand that if you suspend your benefits, any spousal benefits you receive, along with the benefits of your spouse or dependent children will stop as well, apart from the benefits of a divorced spouse. Additionally, you’ll be responsible for the Part B premiums of Medicare. Make sure that you have sufficient supplemental income to go through these suspended years.

Note: You must file Form 521 for practicing this strategy.


How to file social security benefits online

While there are multiple options for filing your social security benefits, applying online is the easiest one. Here are the steps you must follow to apply for social security benefits.

  • Create an account on the official social security website using this URL. https://secure.ssa.gov/RIL/SiView.action
  • Some key details that you must have when filing the application are employment information, self-employment activity, any foreign employment information or credits/pension details, military service details, additional income, previous SSI records/applications, Medicare or other social security benefits, and some critical information about your spouse. The application will ask for the date when you want your benefits to begin.
  • Once you have filled all the details, sign it electronically, and submit the application. In some cases, the SSA might require you to send backup documents, so it’s best to have a copy ready. In case of any questions, you can call the SSA directly at 1-800-772-1213.


The link between social security and Medicare

Social security and Medicare share a direct relation, which means higher benefits lead to higher premiums. However, the SSA has a “hold harmless” provision under which it prevents any reduction in social security benefits when cost-of-living adjustments are lower than the scheduled increase in Medicare premiums.

It is critical to understand that individuals with higher gross incomes ($85,000 if single and $170,000 if married) have to pay higher Medicare premiums. Individuals who are above this threshold receive notice from the SSA concerning their higher premiums and the reason behind it.

You can read more about different premium brackets and the SSA guidelines at the end of this article.


Understanding the new rules and strategies around social security

The modern social security rules demand new strategies, especially with the end of the file-and-suspend strategy and the phasing out restricted spousal benefits strategy in 2019. Here is a list of the most suitable social security strategies for couples, widows/widowers, divorcees, individuals, and children.

Married Couples

  • Married couples should delay the social security benefits of the spouse with higher benefits until age 70, allowing the accumulation of delayed retirement credits. It will enable the couple to maximize their retirement benefits while both are alive. Additionally, it will ensure that the survivor gets the highest possible benefits when the other spouse passes away. The spouse with lower benefits should file for benefits at FRA or earlier if none of the spouses are working.
  • If one spouse has no social security benefits, the working spouse must file for benefits to trigger spousal payments. If the spouse with social security benefits waits until FRA to claim PIA payments, it will maximize the survivor benefit for the other spouse in the event of a death.

Divorced Spouses

With the restricted claim strategy phasing out, divorced spouses should make a decision based on their current financial circumstances. The SSA will automatically choose the highest amount out of the individual’s own benefits and spousal benefits.

Individual Filers

Individual filers should wait until FRA to file for social security benefits, ensuring they receive 100% qualified benefits. In case the single filer is employed, it might make sense to delay distributions until age 70; however, the primary reason behind delaying retirement benefits is to maximize survivor benefits, so weigh your options and choose accordingly.

Children

If the family is seeking benefits for children, it is essential to consider different options. Some strategies include:

  • If the primary social security beneficiary was born before January 1, 1954, it is possible to implement the file-and-suspend strategy to trigger spousal and independent benefits.
  • In the case of a single mother with a child younger than 18 years and low or zero individual benefits, it makes sense to file for benefits at age 62, triggering the benefits for the dependent children.


The Bottom Line

Social security filing is one of the most important financial decisions of your life, so it is crucial to analyze all of your options and choose the most suitable one. If you’re in doubt, make sure to consult a financial expert. You don’t want to regret making a financial mistake that could lower your net social security benefits by thousands of dollars.

If you have any questions regarding Social Security and how it relates to your financial future, please contact me now for assistance. You don’t have to navigate tricky financial topics alone!

Northern Lights Advisors is a fiduciary, fee-only Registered Investment Advisor (RIA) firm based in Seattle, Washington. The information in this article is not intended as tax, accounting, or legal advice. Read the full disclosure here.