Financial wisdom is pivotal as individuals navigate retirement planning, recognizing the often-overlooked impact of Social Security benefits alongside the crafting of a comprehensive plan guided by professionals.
Financial planners stress the need to assess the influence of Social Security on retirement plans before finalizing a retirement date. Certified Financial Planner (CFP) J.P. Geisbauer encourages individuals to create an account on ssa.gov and thoroughly review their Social Security Statements.
This document, highlighting work history and projected benefits, provides essential insights. Frequently, retirees are faced with the problem of when to begin receiving Social Security benefits.
Eric Mangold, a wealth manager, emphasizes the importance of comprehending variables such as the Primary Insurance Amount (PIA) at various ages and filing alternatives. The potential financial repercussions of selecting the incorrect filing strategy are emphasized.
Brian K. Seymour, II, CEO of Prosperitage Wealth, stresses the transformative power of patient Social Security claiming decisions.
Decoding Delayed Social Security Claims
Seymour advocates for delaying benefits, citing the government-backed 8% increase in monthly payouts for each year beyond Full Retirement Age (FRA). The financial impact, illustrated through scenarios, reveals the significant benefits of patience.
However, financial expert Kevin Thompson of 9i Capital Group cautions that delaying may not be suitable for everyone, especially those with health concerns. Early claiming may be justified for individuals facing immediate financial needs or health issues, even though it comes with drawbacks, such as a reduced monthly benefit.
Thompson advises considering potential earnings tests associated with early claiming. Individuals claiming benefits before FRA face annual earning limits, beyond which benefits are withheld. The implications increase after reaching FRA, emphasizing the need for careful consideration.
The discussion on Social Security planning extends to spousal benefits. Seymour underscores the impact of delayed claiming on spousal benefits, providing a potential win-win scenario for couples with differing earning records. However, he acknowledges the challenges that may arise in the event of an untimely death.