Social Security Planning

Although many resources provide Social Security facts or advice, including those from the Social Security Administration, few are oriented towards professionals seeking to offer guidance to clients. I am in a unique position to assist clients with Social Security because of my unique understanding of a range of personal financial planning concerns. This guide is a valuable tool to use when giving advice on Social Security benefits to anyone who intends to collect Social Security.

WILL YOUR SOCIAL SECURITY BE ENOUGH?

If you're 55 or older now, chances are you'll receive the full Social Security benefit as it was intended. But when should you begin to take those benefits? What are your options and how do they fit into your financial planning?

Most people apply to take their Social Security benefits when they are first eligible. For most that could be a mistake that costs you in the long run. Why?

  • The amount you get increases sharply the longer you delay starting benefits. Someone who would get $17,200 a year starting at 62 could boost her benefit to $24,600 (43 percent more) at her full retirement age of 67 or to $30,500 (77 percent more) at age 70.
  • Frequently people live beyond the projected break-even point — where the amount they get from waiting exceeds what they would have collected by starting early.
  • A premature start reduces survivor benefits that a widowed spouse may have to live on later in life.
  • Starting early also precludes strategies that married people (and many once-married people) can use to boost their lifetime benefits.

Social Security Benefits

Another factor, and the most difficult to grapple with, is life expectancy and its impact on your Social Security benefits.

As part of your retirement plan, I look at the various strategies and benefits of all Social Security income scenarios related to life expectancy.

You can start collecting Social Security at any age between 62 and 70. However, if you begin at these ages, your monthly benefit is generally:

  • 62: Your minimum
  • 66: At least one-third more
  • 70: At least three-quarters more