Determining your social security strategy is a cornerstone of sound financial planning, and for many, it’s the single most important consideration. Why is it so important?
- For most investors, social security is the only source of retirement income that keeps up with inflation. In reality, annual adjustments keep up with about two-thirds of inflation, but no other vehicles make such a guarantee.
- Your social security distribution varies greatly depending on the age at which you take it. For example, if you wait until age 70, rather than beginning at your full retirement age (between 65 and 67, depending on when you were born), your monthly payments will be as much as 32 percent higher. And that’s before taking inflation adjustments into account.
- Social security will provide the majority of the retirement income for many retirees, including most married couples in which both spouses worked.
Many factors go into optimizing your Social Security strategy. The law’s complexity is one. Benefits vary not only by the age you begin your distribution, but by other factors, such as your marital status. Spouses in married and divorced couples can be eligible for payments in a variety of circumstances.
Your strategy also must complement the other moving parts of your retirement plan—your retirement date, your other sources of retirement income, your interest in continuing to work in retirement, and so on.
We have years of experience in working with Social Security strategies as an integral part of our clients’ financial plans. You can feel confident that your financial plan will optimize your Social Security benefits.