ss-marital-status-content-widower

Widow(er)s and other survivors

The Scenario:

Let’s start out with an easy scenario, which in reality most often occurs.

  • John: age 60, Full Retirement Age (FRA) 66, life expectancy 70
  • Jane: age 58, FRA 66, life expectancy 90
Strategy 1:

ohm and Jane decide to both claim their benefits at age 62.
John and Jane would then be entitled to collect the following benefits:

Widow or Survivor Chart 1

Jane will be receiving $19,991 annually and this appears at first blush to be a good decision, but let’s take a closer look at this decisions and see the impact a more thoughtful and strategic approach can make.

Strategy 2:

In this case, there are 372,840 different scenarios to be examined to determine an optimal approach that produces the highest value for John and Jane’s lifetime benefits given their situation and life expectancies.

  • John should take spousal benefits in July of 2018, at age 66.
  • John should take retirement benefits in January of 2022, at age 70.
  • Jane should take retirement benefits in July of 2018, at age 64.
  • Jane should take spousal benefits in January of 2022, at age 6.

John and Jane’s total benefits are increased by more than 45% over their lifetime:

Widow or Survivor Chart 2

  • Lifetime benefits using selected dates: $628,400.
  • Lifetime benefits using maximized dates: $911,721.

Using maximized strategy 2, lifetime benefits increase by $283,321.


NOTE: All amounts are in today’s dollars. Lifetime benefits are calculated as the present value of all future benefits assuming you live through your maximum age of life. Discounting is non-actuarial and is based on the real rate of return implied by your assumed nominal rate of return and inflation rate.


As you might guess, these and other scenarios play out differently depending on the differences between the higher and lower Primary Insurance Amounts (PIA)s, and the age of the surviving spouse. There are no pat answers. There is one thing I can safely say: the consequences of making an incorrect decision can be even more than in the example above.


As a practical matter, when a spouse dies, the survivor often has difficulty with simple, daily tasks for some period of time and in many cases is certainly not ready to begin thinking about the complicated issues surrounding Social Security. When a loved one loses a life-partner, I’m ready to help you and your loved one develop a plan that will work for them and provide the best and highest level of benefits we can.


If you haven’t already clicked on “Schedule an Appointment,” perhaps you’d like to take a moment and do it now.

ss-marital-status-content-single

Single Individuals

For the purposes of this example and the application of Social Security benefit provisions, let’s be clear on what “single” Means. A “single” is a person whose earnings record is his or hers alone – no one else can claim benefits on it (children, spouses, ex-spouses, parents, etc.). If you have any of these potential claimants, then complexities that relate to couples, and the allied unfavorable consequences of making the wrong decisions, apply to you, as well, and I strongly suggest that we talk. Schedule an appointment.

The Scenario:

You really are a confirmed 60 years young singleton, your Full Retirement Age (FRA) is 66, and your life expectancy is 85.

Strategy 1:

You figure that it would be nice to get some extra income sooner rather than later and decide to claim benefits at age 62.
You would collect the following benefits:

Single Individual Chart 1

And now, let’s find out how a more strategic approach could help you earn more benefits.

Strategy 2:

In this case, there are 19 different scenarios to examined to determine the one producing the highest value for your lifetime benefits given your age and life expectancy.

  • You should take retirement benefits in Jan 2022, at age 70.

Using this strategic approach, total benefits increase by more than 32% over your expected lifetime:

Single Individual Chart 2

  • Lifetime benefits using strategy 1: $419,832.
  • Lifetime benefits using strategy 2: $556,800.

Using maximized strategy 2, the lifetime benefits increase by $136,968.


NOTE: All amounts are in today’s dollars. Lifetime benefits are calculated as the present value of all future benefits assuming you live through your maximum age of life. Discounting is non-actuarial and is based on the real rate of return implied by your assumed nominal rate of return and inflation rate.


But is that really the only answer… to just wait until 70? Frankly, that depends on you. Depending on your other retirement assets, there may be scenarios that call for an earlier claiming strategy. Also, “singles” have a way of becoming “couples” (in this case, I mean “get married or establish a legal common-law relationship”) later in life, and when that happens, the equation changes immediately.


“Singles” who become half of a “couple” often find that children are part of the deal. In any event, each “Single” making up the “couple” must now begin to consider the probable life expectancy of the other person, their FRA, their Primary Insurance Amount (PIA), and the consequences of each of them filing for benefits at different times.
Before you change your status from “single” to “coupled,” we (you, me, and your prospective spouse) should talk. Even if you are resolute in your single-hood, I recommend that we meet to discuss what part your Social Security benefit plays in your larger overall retirement strategy.


The example (even with only 19 different scenarios) appears straight-forward, but any approach to Social Security needs to take into account all of an individual’s potential assets and the unique life circumstances that we all face. I can help sort this out so that you are in the best possible position moving forward.


If you haven’t already clicked on “Schedule an Appointment,” perhaps you’d like to take a moment and do it now.

ss-marital-status-content-married

Married Couple

As I mentioned earlier, determining how best to maximize Social Security benefits is a tremendously complex issue. The relative life expectancies of each member of the couple are but one of the factors that must be considered. For our purposes, let’s consider this couple:

The Scenario:

  • John: age 60, Full Retirement Age (FRA) 66, life expectancy 80
  • Jane: age 58, FRA 66, life expectancy 95
Strategy 1:

John and Jane decide not to meet with a retirement expert who can help them maximize their Social Security benefits. They instead assume that they’ll receive just as much if they both claim their benefits at age 62.


Using this approach, John and Jane would be able to collect the following benefits:

Married Couple Chart 1

Not bad, you say? Read on.


Let’s consider the same couple, using a more strategic approach that I provide my clients so that they can maximize their Social Security benefits.

Strategy 2:

In this case, there are 30,332 different scenarios to determine the one producing the highest value for John and Jane’s lifetime benefits given their situation and life expectancies.

  • John should take spousal benefits in June of 2018, at age 66.
  • John should take retirement benefits in June of 2022, at age 70.
  • Jane should take spousal benefits in June of 2022, at age 68.
  • Jane should take retirement benefits in June of 2018, at age 64.

John and Jane’s total benefits are increased by more than 30% over their lifetime:

Married Couple Chart 2

  • Lifetime benefits using strategy 1: $985,071.
  • Lifetime benefits using strategy 2: $1,285,886.

Using maximized strategy 2, benefits increase by $300,815.


NOTE: All amounts are in today’s dollars. Lifetime benefits are calculated as the present value of all future benefits assuming you live through your maximum age of life. Discounting is non-actuarial and is based on the real rate of return implied by your assumed nominal rate of return and inflation rate.


In other words, John and Jane left $300,815 on the table, recognizing that the “couple” scenario is by far the most complex with numerous variable and possible outcomes that need to be carefully examined.


For example, what if there were 10 years difference in the ages of John and Jane? What if family history suggests that John would not live to age 69? What if they adopted a 10-year-old grandchild? That’s right, their choices, and the numbers, would all change. But given my understanding of the benefit implications and my access to powerful tools, I am able to help John and Jane find the best strategy available for their specific situation.


If you haven’t already clicked on “Schedule an Appointment,” please do it now.

ss-marital-status-content1

Middle-Aged-Woman2Are you a married couple? A single person who has never been married? Divorced? A widow or widower? Do you have children? All of these things – and many more – must be taken into account when planning ways to maximize your Social Security benefits.

If you’re still reading, I assume that you’re interested in learning what maximizing Social Security could mean for you in light of your particular circumstances. Remember those 2,728 rules I mentioned? Collectively, they mean that the issue really is terribly complex. Quite a few books have been written on the subject, none of which will be made into a movie anytime soon.

So it is time for a disclaimer: The following materials are presented as illustrative examples of what can be achieved, not as what you and I will achieve in your case. In particular, please do not assume that because one particular example is “just like me” that the example will apply to you. In all likelihood, IT WILL NOT! In a nutshell, that is why our meeting is so important. There are as many different financial needs scenarios, and thus as many different potential strategies, as there are people, and there are a lot of people.

I’m going to simplify matters greatly, and I’m going to talk about only four very general personal situations:

  • Married Couples
  • Singles
  • Widows (or widowers) and other survivors
  • Divorasse

To simplify things further, I’m going to discuss just one or two scenarios for each category, and I’m going to present them in outline form. I will call upon you to use your imagination to picture the questioning and analysis that resulted in each strategy presented here.

ss-meeting-content1

You and Social SecurityFor a married couple, maximizing Social Security can often lead to over $100,000 more in lifetime benefits.

Not married? Divorced? We’ll review specifics of your unique situation, and based on those specifics, develop a plan.

I will then prepare a personalized report detailing the best strategy for you and how to implement it, step-by-step.

Going forward, I will be available to meet with you to review the progress of your plan or to help you make changes to it based on changes in your circumstances (a marriage, divorce, new child, change in income, etc.).

ss-eligibility-content4

The Danger of Simple Calculators

Your benefits will depend on both your circumstances and the decisions you make. My job is to help you make sure that your decisions maximize your Social Security benefits in a way that best suits your particular needs.

Some clients ask about using simple financial calculators to maximize Social Security. Given their simplicity, many calculators are destined to give you the wrong answer. Are you aware that most Social Security calculators consider only a fraction of the total possible scenarios to choose from? In fact, you may have over 100 million Social Security strategies to consider. Fortunately, we are able to help you know which ONE is right for you.

How can we do this? We have partnered with Dr. Laurence Kotlikoff, who is one of the most respected authorities on Social Security. Dr. Kotlikoff’s work has been published and recognized by The New York Times, Forbes, PBS, The Wall Street Journal, Bloomberg, and many other prominent media outlets. Through our partnership, Dr. Kotlikoff has given us access to his research, which allow us to give our clients the best possible strategy to maximize Social Security benefits. Social Security is complicated, but choosing the best strategy for your situation doesn’t have to be. Schedule your appointment now so that we may remove any guess work or frustration and replace it with a solid strategy based on the best research in the industry.

ss-eligibility-content3

Why Social Security is more than “signing up”

When I meet a new client, I start by asking some pretty basic questions, every one of which contributes to the development of a personal Social Security strategy:

  • Are you still working?
  • Do you plan on working after you retire?
  • Do you come from a long-lived family?
  • How is your health?
  • Will you still have health insurance?
  • Are you eligible for benefits on someone else’s Social Security “record” (basically, someone else’s account)?
  • Do you have other income to support you if you decide to delay taking your benefits?
  • Will other family members qualify for benefits with you on your record?
  • Are you married, single, or divorced?
  • Do you have children, and if so, how old are they?

Based on your answers, I’ll have even more questions.
Every one of these factors should be taken into account before you elect to begin receiving Social Security benefits.

ss-eligibility-content2

What you already know about Social Security.

Social Security is available only to those who pay into the program – about 96% of American workers. While you may think that everyone pays into Social Security, some people do not – employees of some railroads and state employees who participate in state pension programs, etc. Social Security offers participants a predetermined, steady, lifetime income based on the amount of money they have put into the program. To a certain extent, it adjusts for inflation and offers survivor’s benefits. You probably know that the longer you delay receiving your Social Security benefits, the more money you will receive each month.

ss-eligibility-content1

Morning Coffee

 

To be eligible for Social Security, you must have “40 credits” of covered work. For most people, this means working for at least 10 years during which they had earnings that were subject to Social Security tax or self-employment tax. You must also be at least 62 years old. In addition, you may qualify for benefits as a spouse, former spouse, or survivor of a covered worker.

What you already know about Social Security

Social Security is available only to those who pay into the program—about 96% of American workers. While you may think that everyone pays into Social Security, some people do not—employees of some railroads and state employees who participate in state pension programs, among others. Social Security offers participants a predetermined, steady, lifetime income based on the amount of money they have put into the program. To a certain extent, it adjusts for inflation and offers survivor’s benefits. You probably know that the longer you delay receiving your Social Security benefits, the more money you will receive each month.

ss-planning-content3

Why your advisor doesn’t offer this service.

You may have received financial and retirement planning advice from a financial advisor, an insurance agent, or even a “family banker.” None of these individuals are charitable institutions – in many cases, their advice includes recommendations on the purchases of insurance policies, annuities, stocks, etc., for which they receive a commission as do I when I sell these instruments. In my own case, I found that I could not offer the best possible service to my clients without becoming an expert on Social Security, as well. Obviously, no commissions are paid on this portion of my business. It is something I choose to do to provide the best, most complete, retirement planning services I can. Like my colleagues, I am not a charitable institution, either.