Monday, March 31, 2014

What You (and Your Financial Advisor) Don’t Know about Collecting Social Security Could Literally Ruin Your Retirement

What You (and Your Financial Advisor) Don’t Know about Collecting Social Security Could Literally Ruin Your Retirement

The story usually goes something like this: You work hard all your life and contribute to Social Security with the expectation that, come retirement, you’ll hang up your work cloths and your monthly payments will begin supplementing your retirement lifestyle. That sounds right for the most part, except that the way you opt to collect your benefits could mean leaving thousands – if not hundreds of thousands – of dollars on the table.

If you are counting on receiving any kind of help from Social Security Administration employees, you are out of luck, because they are specifically prohibited from providing any form of financial advice. This means they can’t offer a shred of help when it comes to selecting the option that will give you and/or your family the maximum lifetime income. That may be hard to swallow, but it’s the reality.

Personally, I think what’s even worse is that an overwhelming number of so-called financial advisors don’t know enough to help their clients with strategies that could help boost their social security retirement income. That may sound like a strong statement, but how else would you account for the countless folks I meet, day in and day out, who are working with financial advisors, yet have no clue that they have better choices in terms of how they collect their Social Security?

Here’s a classic situation to support my point. Allison submitted this request through the “Ask Your Question” feature on our website. Before I go any further, let me take a moment to thank Allison and her parents for allowing me to share their story.

Allison’s Question:
I’m contacting you because my coworker believes that you may be able to help my parents come up with a better solution regarding their Social Security benefits. 
My dad, who’s now 66, took early Social Security retirement at 62.  My mom just turned 66, her full Social Security retirement age, but wants to wait until she’s 70 so that she can collect her highest benefit. However, she could use some extra income right now. Their financial advisor is suggesting that she start collecting now, since her work income will not reduce her benefits like it did for my dad. I’d really appreciate any assistance you can offer.

My Response to Allison’s Inquiry
First of all, thank you for contacting us about your parents’ situation.

I believe your mom is going to be pleased to hear about what is called Claim Now; Claim More Later, which is one of the little-known strategies for collecting Social Security that I cover in my complimentary special report “Secure YourFuture.” Because your mom has reached her full Social Security retirement age, she can immediately begin collecting benefits – here’s the key phrase – as your dad’s spouse.

This will allow her to receive half of your dad’s unreduced benefit amount, in spite of the fact that he began collecting his benefits early, at age 62. The other, even more powerful thing here is that your mom’s spousal benefit checks will not affect her own work record benefits. Therefore, she will continue to earn delayed retirement credits, just as she desires, until she’s age 70, at which time she will be able to switch over from collecting as a spouse to taking her own much higher benefits.

In  a nutshell, your mom can collect spousal benefits right now while her own benefit keeps growing. And by the way, her employment income will not cause any reduction in her benefits because she’s attained her full retirement age.
Allison’s mom would likely have missed out on collecting the spousal benefit to which she is entitled if she’d take her so-called financial advisor’s suggestion to start collecting her own benefits right now. Of course, it all ended well for her. But that’s because she found us! I wonder how many hard-working Americans out there are unknowingly walking away from Social Security money for which they qualify.

Does your financial advisor have the right knowledge and experience?

Download your very own copy of my complimentary Social Security strategy report. You can also contact us for suggestions about how you can get the most out of your retirement savings.

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