Restricted application Social Security strategy is on its way out

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Social Security checks are printed at the U.S. Treasury Philadelphia Finance Center in Philadelphia, Pennsylvania on February 11, 2005. Photographer: Dennis Brack/Bloomberg News

Restricted application Social Security strategy is on its way out
Baby boomers who reach full retirement age this year belong to the last batch of retirees who can use the Social Security strategy known as restricted application, according to this article from Kiplinger. This strategy enables retirees to restrict their application to spousal benefits and allow their benefit to grow until they reach 70. Those who reach FRA this year should consider this strategy. “It is a way to get a little extra income for four years,” says a financial planner.

Podcast on restricted application: Clients often miss out on thousands in extra benefits

What to do if the stormy stock market has derailed your retirement plans
With a market downturn in a distant horizon, near-retirees are advised to adjust their portfolio and investing strategy to reduce the sequence-of-return risk, according to this article on MarketWatch. Clients near retirement should consider having one to three years’ worth of cash or liquid investments on hand so that they don’t have to worry about paying for their everyday living expenses when their investments are down, says one expert. Having additional funds in cash ensures that the retiree won’t have to be liquidate at an inopportune time, the expert said. Clients should also consider shifting to safer investments such as bonds. It also helps to continue saving in retirement and health savings accounts, as well as to have a good estimate of their expenses in the golden years.

A guide to working while on Social Security
Older workers who start collecting Social Security benefits before reaching full retirement age can expect reduced benefits if their income exceeds a certain threshold, according to this article on personal finance website Motley Fool. To avoid the reduction, seniors are advised to wait until FRA to file for the benefits. The FRA for retirees varies depending on the year they were born. For example, the FRA is 66 for seniors born from 1943 and 1954, and 67 for those born in 1960 or later.

Retirement is a transition, not a destination
Seniors will be better looking at retirement as a transition period than a destination, writes a Forbes contributor. "Remember that you’re retiring from a job, not from life," says the expert. "Reflecting on your past transitions will help you as you anticipate your retirement transition."

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