Boomers take special Note: Social Security adjustments can mean up to six figure changes in lifetime income.
We don’t believe the importance of a program like social security, to future retirees, has ever intersected with a generational or tectonic plate shift like what is going on right now in health care, medicine and longevity sciences. Those who can, are getting more exercise, eating better and healthier foods, paying closer attention to stress and getting faster and better medical attention. The quality of medical care alone, relative to our parents’ generation, is insanely better. Think about the widespread availability of MRI’s, Cat scans, and advent of so many less invasive (faster recovery) surgeries. The potential exists for many of us to live well past 100 and be in retirement longer then we actually worked! That, of course is the good news. The other side of the coin, unless working the drive through at 90 is a life’s ambition , means most of us will need to adapt, save and Invest more wisely, but more importantly, be aware of what you have rightfully coming from our friends at Social Security.
Social Security insurance was never meant to be more than a single “leg” of a three or four legged retirement “stool”. Even for the super wealthy, given you have paid into the program for 40 years by the time you retire, you owe it to your family to extract the most you can during retirement. Hey if you don’t care about your family getting any more money, why not just maximize the “return on your investment” and donate any excess cash to a local foodbank.
OK, let’s establish an assumption: likely you were going to spend the money in retirement anyway, weather you maximize Social Security or not. Wasn’t there an old proverb “have it or not is twice as much”? Anyway, If you invest some time and energy and pick the right strategy, and properly integrate it with your existing pensions, 401K, IRA, Roth and private investment accounts, you will find your retirement stool has some very sturdy legs. Why not take the most you’re entitled to and let your investments continue to earn more by staying invested. This could mean your portfolio starts to function more like an endowment and less like a checking account.
An important and core social security strategy revolves around delaying your full benefits by filing when you reach your Full retirement Age (FRA) and then “suspending” receipt of those benefits. This will then allow you to grow your Primary Insurance Benefit (PIA) by 8% a year until you turn 70. Given the current two year US Treasury Note yields about 0.75 %, that is simply amazing. The exact same credit risk the world accepts less than 1pct return on for billions of dollars’ worth of securities, you get paid over 10 times that amount just to delay receipt of Social Security benefits for a single year. Even better you can do this for up to 3 or even 4 years in a row! When you combining this outsized “return” for delaying with specific, non-conventional, spending and supplementation and integration strategies, your portfolio (and future retirement) can really be well positioned for today’s longer lifespans. Its complicated , but worth your time.
Join OCM and noted Social Security expert Kurt Czarnowski on October 27th or December 1st for a special dinner and lecture on this and other important strategies you need to know to maximize your retirement benefits. Kurt is a former Regional Communications Director for the Social Security Administration (SSA) in New England for 19 years, and a 34 year veteran of the agency.
Contact our office for further details.