Social Security: Maximize Your Benefit!
At RPA, we use software that calculates our clients’ Social Security benefit then we use that data to help us configure suitable retirement portfolios and distribution strategies.
At the beginning of last year, I decided I wanted to be able to talk with a little more authority on Social Security issues like “PIA,” “FRA,” WEP” and of course, everybody’s favorite, “Bend Points”—I’m not kidding! I understood the basics of Social Security planning, of course, but with our friends in Washington regularly threatening to “modify” entitlement programs, I thought I’d have a closer look “under the hood,” so to speak.
I became aware of an organization called National Social Security Advisors. I did some research, liked what I saw, passed their competency exam and became a licensed member. I can now discuss why Social Security “bend points” are important to our future well-being.
I learned a lot of other stuff of course, but two data points really caught my eye:
- $863,000,000,000 was paid to 59 million beneficiaries during 2014.
- More than 90% of all recipients do not maximize their benefit.
Yep, re-read that second one! Apparently, although we pay into the Social Security system all our working lives, less than 10% of us are concerned enough to maximize the benefit!
The probable reason according to NSSA, is that the average couple has about 12 different claiming strategies and “most people don’t have a clearly defined plan for their future [so] they can’t take advantage of those strategies.” Are you kidding me?!
6.2% of every dime we ever earn—up to $118,200 per year (currently)—throughout our working lives, and hardly anyone is interested in maximizing the return of those dollars during retirement??
Social Security is a fundamental component of how we help our clients plan for their retirement, and with the help of planning software like MoneyGuidePro and organizations like National Social Security Advisors, we’re poised to help them understand their options to maximize their benefit.
Haven’t received a Social Security statement or registered to view your benefits online? To access your benefit statement, go to: www.socialsecurity.gov/mystatement. Anyone 18 or over with a Social Security number, e-mail address and valid mailing address can establish an account and access key information such as personal earnings history and retirement benefit estimates at various ages. Once you set up your account, it’s a good idea to print your most recent statement. Having solid documentation of your actual benefits (as opposed to an educated guess) enables you to plan with greater precision and take full advantage of your benefit options.