Social Security – Focus on Retirement Benefits Today

Social Security – Focus on Retirement Benefits Today

Social Security: a topic that is sure to start a lively discussion, regardless of the age of the participants.
While the particulars of Social Security – contribution rates, distribution dates, taxes and income
levels of recipients – are likely to look different for future generations, let’s focus on the system that pays
benefits at retirement as it is today.

Most Americans decide when to collect SS benefits with little or no advice.
Recent studies suggest that 2/3 of Americans begin collecting benefits before their
full retirement age (FRA). Many erroneously assume that filing for benefits as soon
as they are eligible, at age 62, is the best strategy. And while that may in fact be the
best strategy for some, for many others there are attractive alternatives. So how could
you maximize your Social Security benefits?

The optimal claiming strategy would be clear if you knew exactly how long
you would live. Since that’s a bit tricky, it helps to begin by realistically assessing
your health condition, family history and likely longevity, as well as your personal
financial needs. If you are married, you’ll want to optimize the payouts for the longest-living
spouse. If you’re still working, your income impacts your benefits before your FRA.
In general, the longer you wait to begin receiving benefits, the better off you’ll be.

For those born after 1943, your benefits will increase 8% a year from your FRA until age
70, a return that’s certainly been difficult to achieve in the stock market recently. You might
want to think of SS as a form of annuity payment. The claiming-age decision can revolve
around three types of benefits: worker benefits, spousal benefits, and survivor benefits. It’s a
complex calculation, and your decision may be a significant factor in your ability to maintain
financial security throughout retirement.

There are many tools available to help individuals determine how best to maximize their Social Security
benefits. www.socialsecurity.gov is one. RK Financial Advisors provides another with a software program
that runs alternatives for clients’ best interest. Call us if you are interested in the alternatives.

Raskob Kambourian Financial Advisors is an independent, fee-only comprehensive financial advisory firm registered with the Securities and Exchange Commission.  We offer expertise, competitive pricing, and personalized financial services to meet your “Life Planning” needs.s.