Feel like gambling with your Social Security payouts?

Fall is here and we are expecting another mild winter; happy days for me – the less snow we get the fewer times I have to have my roof shoveled.

I haven’t heard from any readers about the “filial responsibility laws” I last wrote about, which is probably good news, since it means that seniors are taking care of their children and children are happily taking care of their parents.

After my own 14-day stay in the hospital, which cost over $100,000, I am curious as to what Caitlyn Jenner had to pay for her sexual gender reassignment surgery. Would it be possible to take a medical deduction off your taxes? One would probably have to get a diagnosis from a licensed psychotherapist that the patient has a gender identity disorder.

If one is really desperate, you could get a lump sum of $40,000 to $50,000 or more from Social Security. It is a bonus but you should really think hard before taking it. It mostly depends on your age, if you are married, and how much in liquid assets you have, and you have reached your Social Security full retirement age without having collected any benefits.

But if you are qualified and you opt to take the lump sum, you may be giving up an even bigger return check from Social Security for the rest of your life.

One way to get the lump sum benefit is by doing what is known as “File and Suspend” strategy. That means claiming your benefits after you reach Full Retirement Age and before age 70, but not taking them. Meantime, you’ll be accruing an 8 percent bonus in the size of your monthly checks, until age 70 — those are called delayed retirement credits. If, after you suspend benefits, you decide you’re ready to start collecting, you can get a lump sum from Social Security for the amount you would’ve received between the date you filed and now.

There’s also a lump-sum benefit for people who don’t use the file-and-suspend strategy, but it’s less generous. If you delay taking Social Security and, before age 70, decide you want or need to begin claiming benefits, your lump sum will be a retroactive benefit of no more than six months worth of payments.

When you get the lump-sum payment, you forfeit the delayed retirement credits you accrued. In other words, your lump sum is based on the smaller benefit you would’ve received at Full Retirement Age. This is also true for your lifetime monthly benefit and benefits for your survivors.

Also, going the file-and-suspend route keeps you from collecting spousal benefits while you postpone your own benefit.

And a lump-sum payment from Social Security might increase the amount of your benefits that are taxable. (IRS Publication 915 has the rules on this.)

Taking a lump sum can have repercussions when life throws a curveball. Whether to take a lump sum benefit is a personal and complex matter. It depends on making bets on how long you will live.

To estimate your Social Security benefits

There is a computer program that you can find on a site such as http://www.MaximizeMySocialSecurity.com to see what your Social Security benefits might be in various situations. But no calculator accounts for all of the rules governing Social Security benefits.

You can also estimate Social Security benefits at the http://www.Social Security.gov site and watch a video from the National Academy of Social Insurance explaining why it often pays to wait to collect benefits. The video is at https://www.nasi.org/learn/social-security/video-social-security-it-pays-wait

You can help someone

Is there anyone in Anchorage who has the time and inclination to help in giving information and referrals to seniors, who call in with questions, needing help about Medicare, Medicaid and Social Security and other senior issues? If you are newly widowed or alone, you will find that helping others is a wonderful way to help yourself. Please call me if this is you.

Rita Hatch is an Older Persons Action Group board member and volunteers for OPAG’s Medicare assistance program. Call her at 276-1059 in Anchorage or 1-800-478-1059 toll-free statewide. Her email address is ritaopag@gci.net.

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