An article originally published on ThinkAdvisor.com discussed several Social Security talking points that you might find interesting. For example, “claim early, before your full retirement age, in order to get back your contributions”; or, “I don’t know how long I am going to live, so I’m taking it now”; or, “the Social Security program is bankrupt and I better take it now”. The consultant providing the advice is Michael Lonier, a retirement management analyst. First, many believe that it is best to take benefits early, since life expectancy is an unknown. While it is true that you never know when you may be called home, the trend is for increasing life expectancy. The maximum monthly benefit at age 62 in 2016 is $2,102, while those claiming at age 70 would receive $3,576. That is a significant difference in monthly income. Related to this belief is the calculation of the breakeven point: the tradeoff between taking money sooner and getting a lower amount forever versus waiting and getting a higher amount. How long do I have to live before I would receive more money during my lifetime by waiting for the higher Social Security benefit?
Another thought process is that you don’t need to maximize monthly benefits because you will be spending less in retirement. Most debt may be paid off, college tuition is long gone and, if all else fails, your kids will help with your support. Good luck with the last thought! Of course, everyone has different cash needs and resources. However, if life has taught us anything, it is that the unexpected is the norm rather than the exception. There are numerous studies highlighting the enormous anticipated healthcare costs in later life. The good news is that senior citizens that utilize Medicare Advantage plans will have a cap on annual out-of-pocket expense in 2016 of $6,700. Travel and grandkids will also contribute to the cash drain. Be aware that saving is as important in the retirement years as it should have been prior to retirement. As far as the solvency of the program, who knows? There is a definite reluctance to address the problem and a failure to do so only increases the “down the road” cost to maintain it. Of all the “myths”, this is the one I find more likely to come to fruition. I think it will be important for you to plan carefully, using any and all resources available to you before it is time to start receiving benefits. Schedule time with your financial advisor, your tax advisor, your attorney, as well as social security consultants available to you in this community. Good luck.
When you call for help, hopefully your advisors will respond with “here I am”. A simple response, but so powerful. The same response Samuel, Mary, Moses and the disciples had when called by God. What would your response be? I often wonder. The answer seems so simple on the surface, but is it? If God called me in a dream and sent me to the top of the church steps to preach for inclusion of all in the church family: those who can’t tithe, those who have sinned grievously, those who don’t look like us, those who don’t speak like us, those who may not be as “clean” as us, those who disagree with us, those who can’t dress like us, how would I respond? Would I shout “Here I am, at your service, at your command!”, or would I pretend I couldn’t hear? Would I be able to go out in the neighborhoods and witness for the true and living God, or would I hope someone else would beat me to the punch? Pray for me, pray for us, that the answer today, tomorrow and always will be “yes”. From a MeatLoaf song, “I got a taste of Paradise. I’m never gonna let it slip away.”
Although this information has been gathered from sources believed to be reliable, it cannot be guaranteed. This material is intended for informational purposes only and should not be construed or acted upon as individualized tax, legal or investment advice. FSC Securities Corporation does not offer tax or legal advice. The views expressed are not necessarily the opinion of FSC Securities Corporation. Financial Solutions Group is a marketing name. Financial Solutions Group is located at 128 Versailles Blvd, Alexandria, LA 71301. We can be reached at (318)448-3201. Securities, insurance and advisory services offered through FSC Securities Corporation, member FINRA/SIPC.
