Not Sure When To Claim Social Security? Your Financial Advisor Can Help

For most retirees, Social Security is their most reliable income source. After all, there’s a guaranteed amount of money coming each month once you claim Social Security, and those benefits increase over time when prices rise due to inflation. And, unlike your savings, you don’t have to worry that you’ll outlive your Social Security benefits. 

Since this income source is such a good one, being strategic about when to claim Social Security can make a huge impact on your finances. It can be hard to do that, though, as there are so many variables that affect when it’s the right time to start your benefits.

The good news is, you don’t have to go it alone. A financial advisor can provide invaluable help in determining the optimum time to begin collecting your Social Security checks so you can make smart choices that maximize the impact of these important benefits. 

Why is your Social Security claiming age so important?

The age when you claim Social Security matters a lot, because that claiming age can impact:

• How much income your benefits provide monthly and for your lifetime
• Survivor benefits received by your widow or widower if you pass away first and have earned more than your partner
• Whether you are allowed to work while you collect Social Security without risking some of your benefits disappearing

There is an eight-year window of time when it is both possible and makes sense to start your Social Security payments. You can claim beginning at 62. You can also increase monthly benefits for every single month after 62 that you delay a claim, up until age 70. Since there’s no extra benefit to waiting after 70, it only really makes sense for most people to claim between 62 and their 70th birthday 

The stakes are very high regarding when you claim during that eight-year window. If you delay until 70, you are, of course, giving up eight years of income when benefits were available to you, but you didn’t collect them. If something happens to you and you wait, you may never get any of your Social Security, or you may get it when you’re too impaired or sick to do anything with it.

On the flip side, research has shown that delay is the better option for most retirees to max out lifetime benefits, and waiting to claim can not only increase your own monthly checks later on in life but can also help ensure your surviving spouse has enough to live on if you pass away first. So, there’s a solid argument to wait and a solid argument to claim early, and figuring out the right move for you can be really complicated.

How can a financial advisor help?

The good news is, you don’t have to make your Social Security claiming choice on your own — and you probably shouldn’t. Important decisions like this are exactly what a financial advisor is for.

Financial advisors do a lot more than just give investment advice or run the numbers to tell you how much income you need as a retiree– although advisors do, of course, do these things.  Good advisors with solid experience and professional credentials also know how to help you make a fully informed and well-thought-out plan for retirement, including for when you should claim Social Security. 

Advisors can be a great resource in deciding when to claim your retirement benefits because:

• They can help you run through the short-term and long-term impact of different claiming ages under different scenarios, so you can see how your choice of when to start Social Security could impact your finances.
• They can work with you to define clear goals. Advisors dig deep to understand what you want to accomplish with your money, since your funds are to be used as a tool to help you have the secure retirement you deserve. By looking at the big picture, your advisor can help you to decide at what age is best to claim Social Security to accomplish your plans. 
• They can help you understand how Social Security benefits will fit in with your other income sources. An advisor can help you to make a detailed and comprehensive plan for how to support yourself as a retiree, factoring in Social Security income, income from other sources, and spending habits. Getting a better grasp on your finances can allow you to make Social Security claiming choices solely based on what is best for your overall situation, instead of looking at just your claiming age without a broader understanding.

These are just some of the many ways a financial advisor can help you decide what the best move is with your Social Security. With such an important source of income at stake, getting professional help just makes good sense

The post Not Sure When to Claim Social Security? Your Financial Advisor Can Help appeared first on 24/7 Wall St..