Planning Opportunities: What Pre-Retirees/Retirees Need to Know About Social Security

By Jim Terwilliger and Laurie Haelen

Before I came to CNB Wealth Management six years ago, I remember seeing Jim Terwilliger’s byline in 55 PLUS and thinking, how does he always come up with such good topics?

I have always enjoyed the magazine, and the featured author’s inspiring stories give me great ideas on finding more fulfillment in day-to-day life.

Little did I know that one day I would be the one coming up with those good topics and hopefully helping someone learn something new, as Jim has helped me do many times in the past six years.

Jim is an inspiration to all of us at CNB, as his curiosity knows no bounds and is only surpassed by his desire to help others. It will be hard for me to fill his shoes, but I hope that my passion for the business of sound financial advice and my love of the written word will create a winning combination for the growing readership of 55-plus.

Just a few things about me: I am a lifelong Rochester resident and have had the good fortune of being in the financial services business since 1992.

Most of my career was spent at large, publicly traded companies, until I found a home at Canandaigua. I can now effectively match my desire to help others meet their financial goals with a wonderful team in a truly client-focused bank. I live in the city with my wife and our two dogs and enjoy spending time with family and friends, hiking, music and trying to play golf.

As this was Jim’s last article and he had already started to work on it, we decided to finish it together.
— Laurie Haelen

➼ Trying to juggle the myriad financial choices facing pre-retirees and retirees is a daunting task. Not only are the options overwhelming in number, but thanks to Congress and the IRS, they are always changing.

Couple that with one’s goals and life circumstances in constant flux, charting and managing a financial pathway through this maze is an ongoing project, not a one-and-done exercise.

Let’s look at some situations you may encounter and ideas as to how you might turn them into positive planning opportunities.

Social Security do-overs

Many people may not know that there are options for “undoing” the Social Security distribution strategy they have already implemented. The reasons for doing so include reclaiming at a later time to increase your payout, suspending payments to resume them at a later time with a higher monthly benefit and a need for an emergency cash infusion.

• Between age 62 and FRA (full retirement age): Anyone can withdraw their application for benefits within the first 12 months of claiming benefits. However, the amount already taken must be repaid. You can then file later to receive a larger monthly benefit for the remainder of your life.

It is important to note that this can only be done once and if you are already receiving Medicare, you will have to pay Part B and Part D premiums directly if you wish to continue coverage. This could be a good strategy for someone who decides to continue to work for either financial reasons or because they find fulfilling work shortly after retirement.

• Between FRA and age 70: Anyone can suspend their social security benefits and they do not have to be repaid. During the pause in payment, the benefits earn the 8% per year delayed retirement credits, effectively giving you an 8% deferred raise every year until you resume. To maximize ultimate benefits, most folks who suspend will wait until age 70 to resume. This strategy could work well for you if you are finding that you are not needing as much income as you anticipated, or longevity runs in your family.

This strategy also can benefit married filers, because if the spouse who suspended benefits dies, the survivor will receive the higher benefit (up to 100% of the deceased retiree’s benefit).

• Six-month retroactive period after FRA with lump sum payment (do-over in the opposite direction): At FRA plus six months and beyond, you can opt to receive six months of your benefit in a lump sum. This can be helpful for someone who needs a lump sum for an unplanned expense. A downside is that receiving the retroactive lump sum reduces your monthly retirement benefits by about 4%. It can also work for someone who is claiming a spousal or survivor benefit. Such benefits are worth their maximum value at the beneficiaries’ full retirement age and do not increase due to the delayed retirement credits—unlike retirement benefits.

Navigating retirement can be a challenge, but understanding the many options available, along with careful planning, can help ensure a financially secure retirement.

Laurie Haelen, AIF, is senior vice president, manager of investment and financial planning solutions, CNB Wealth Management, Canandaigua National Bank & Trust Company. She can be reached at 585-419-0670, ext. 41970 or by email at

James Terwilliger, CFP, is senior vice president, senior planning adviser, CNB Wealth Management, Canandaigua National Bank & Trust Company. He can be reached at 585-419-0670 ext. 50630 or by email at