Social Security: What You Don’t Know Can Cost You
Social Security Income is a unique asset in a retirement income portfolio. It’s the ONLY asset that provides these 3 benefits:
- A check every month as long as you’re alive
- Your payment rises with inflation
- Guaranteed by the Government
Most people think there’s only one way to access Social Security benefits. Big mistake. According to the Wall Street Journal, there’s $10 billion in unclaimed Social Security benefits – every year – because men and women don’t know or understand their options.
It’s not their fault. There are 2,728 rules that affect the size of your Social Security payout, and 567 ways to claim your benefits. No wonder people make mistakes.
Taking the right Social Security benefits at the right time can make a huge difference to your living standard throughout retirement.
Unfortunately, Social Security has some very nasty “gotcha” provisions, so if you take the wrong benefits at the wrong time, you can end up getting the wrong, as in smaller, benefits forever.
According to a 2012 study by Alice Henriques, Board of Governors for the Federal Reserve, most couples do NOT maximize Social Security value to the household.
One reason: married couples face a bewildering array of claiming choices. Consequently, most do a poor job of deciding which benefits to claim and when to claim them. An average couple can easily leave $100,000 on the table by making an uninformed decision.
It’s frustrating, but the government won’t tell you. Other advisors won’t tell you. The Social Security Administration is forbidden by law from telling you.
Also, don’t count on the folks at the local Social Security office. They routinely tell people things that aren’t correct about what benefits they can and can’t receive and when they can receive them.
Taking Social Security benefits – the right ones at the right time – is one of the biggest financial decisions you’ll ever make, so you need to get it right.
Getting it right on your own, however, is almost impossible. There are thousands of combinations of months for each of two spouses to take retirement benefits, spousal benefits, and whether or not to file and suspend one’s retirement benefits. There are also Start-Stop-Start strategies to consider. Each combination needs to be considered to figure out what choices will produce the highest benefits. For some couples who are very different in age, survivor benefits also come into play. In that case, the number of combinations increases exponentially!
Fortunately, Sage Financial Partners has access to a proprietary calculator that can help you find the right answer. It executes exhaustive searches of all combinations of months in which you can take actions, but thanks to modern computing power and careful programming, our program can run through millions upon millions of combinations of decisions incredibly fast. We can find the formula to maximize your benefits.