Social Security

Social Security is more than just a monthly check—it's a cornerstone of retirement income that requires strategic timing to maximize benefits and align with your overall financial picture. While many assume the best approach is claiming early (at age 62) for immediate cash flow or delaying until age 70 for larger payments, the reality is nuanced. 

At our firm, we view Social Security planning as both an art and a science, drawing on our extensive experience to tailor decisions that consider your unique circumstances, family dynamics, and long-term goals. Our certainty-focused method ensures your choice enhances financial security without unnecessary risks.

 

Understanding Social Security Basics

Social Security provides retirement, disability, and survivor benefits based on your work history and earnings. Key elements include:

  • Full Retirement Age (FRA): Typically 66-67, depending on your birth year—this is when you receive 100% of your Primary Insurance Amount (PIA).
  • Early vs. Delayed Claiming: Claiming before FRA reduces benefits by up to 30%, while delaying past FRA increases them by 8% per year until age 70, potentially boosting payments by 24-32%.
  • Spousal and Survivor Benefits: Spouses can claim up to 50% of the higher earner's benefit at FRA, and survivors may receive up to 100%—strategies like "restricted applications" or "file and suspend" (though limited post-2015 reforms) can optimize household income.

Eligibility requires at least 40 credits (about 10 years of work), and benefits are inflation-adjusted via Cost-of-Living Adjustments (COLAs).

Key Financial Considerations

Optimizing Social Security isn't one-size-fits-all; it intersects with other ITEMS components like income planning, taxes, Medicare, and estate strategies. We incorporate:

  • Spousal Benefits: Coordinating claims between partners to maximize total household benefits, such as one spouse claiming early while the other delays.
  • Longevity Factors: If you expect a longer lifespan (based on health, family history, or conservative projections), delaying can yield higher lifetime payouts. We overestimate life expectancy in our analyses for added certainty.
  • Asset Allocation and Withdrawal Strategy: Delaying Social Security allows your investments more time to grow, reducing sequence-of-returns risk. We integrate this with conservative growth assumptions and tax-efficient withdrawals to preserve your portfolio.
  • Tax Implications: Up to 85% of benefits may be taxable based on combined income— we plan to minimize this through Roth conversions or timing with RMDs.
  • IRMAA and Medicare Integration: Higher Social Security income could trigger Medicare surcharges; we align claiming strategies to avoid or mitigate these penalties.

    By overestimating inflation and underestimating market growth, we ensure your Social Security decision supports a resilient plan, even in worst-case scenarios.

How We Help

Our seasoned advisors provide personalized guidance within the ITEMS framework, helping you navigate Social Security's complexities:

  • Benefit Projections: Using official tools and our expertise to forecast scenarios, factoring in spousal options and longevity.
  • Timing Optimization: Recommending the ideal claiming age based on your health, cash flow needs, and integration with pensions, annuities, or withdrawals.
  • Scenario Stress-Testing: Evaluating choices under conservative assumptions to prioritize certainty and avoid regrets.
  • Ongoing Reviews: Adjusting for life events, like marriage or health changes, and monitoring program updates (e.g., potential future solvency adjustments).

Let our experience turn Social Security into a powerful asset for your retirement. Reach out for a free consultation to explore how it fits your comprehensive plan today.