Changing demographics and family make-up has also made the
Social Security decision more complicated. For example, what if you are
divorced? Can you collect the benefits of your ex-Spouse? What about Multiple
Marriages? Which benefit are you entitled to collect, and at what age? What if
your spouse is deceased? What will happen if you re-marry; will you forfeit
spousal benefits?
A Financial Advisor can assist you with planning for your
retirement income needs and help to develop strategies to estimate how many
years your money will last. Your trusted Advisor will also help you determine
how much money you will need.
Consider these four costly mistakes that Retirees make about Social Security2
Mistake #1
– Underestimating the real value of
Social Security – For years, Financial Planners have warned that Social
Security will never provide enough income for us to live on. For many, this is
true however Social Security is still a very important component of Retirement
benefits.
Mistake #2
– Rushing to Collect, then regretting the
reduced benefits for the rest of your life – There is a reduction to your
benefits if you do not wait until you reach Full Retirement Age (FRA). You can
also experience an increase, if you collect after FRA. Below is a table that illustrates
the differences in payouts:
Age
|
Benefit
|
62
|
25% Reduction in Benefits
|
63
|
20% Reduction in Benefits
|
64
|
13.3% Reduction in Benefits
|
65
|
6.7% Reduction in Benefits
|
66
|
FULL Benefits
|
67
|
8% Increase in Benefits
|
68
|
16% Increase in Benefits
|
69
|
24% Increase in Benefits
|
70
|
32% Increase in Benefits
|
Mistake #3
- Not understanding the various ways
married couples can integrate their benefits – There are various types of
benefits for which married spouses might be eligible, and how those benefits
might interact with each other. There are Spousal benefits, a worker benefit or
Survivor Benefits. If you were divorced, you have options depending on whether
or not only one spouse worked, or both spouses worked. There are ways to
optimize benefits by developing a claiming strategy. There are 81 different
strategies you can use to maximize benefits. You can use a “File and suspend”
strategy; a “File a Restricted Application” strategy; or a Combination of the
two. You can even file then pay back the
money within a year to get to your maximum benefit. Everyone’s situation will
be different. A Financial Advisor will help you determine the best strategy.
Mistake #4
– Getting Blindsided by the “Tax Torpedo”
– Let’s face it, many seniors have retirement accounts in defined contribution
plans (IRA’s, 401K’s, 403B’s, 405 Plans) that will have to be eventually taxed.
The government requires withdrawals from these plans once retirees reach age 70
½ so that your distribution can be taxed. When you combine the minimum Required
Minimum Distribution (RMD) with the Social Security benefit, it may trigger
higher taxation of Social Security benefits. There are also strategies to
reduce the amount that you are taxed if you continue to work after starting
social security. Fortunately, some mistakes can be avoided.
Contact Lifetime Financial
Group for a Seminar schedule to learn more today.
Consider this:
(1)
40% of retirees spent more on uninsured
healthcare cost than expected averaging $240,000.
(2)
70% of retirees over age 70 will need long term care
(3)
Retirement accounts account for 42% of wealth
How much time will you have to save up for retirement? How
many years can you expect to live after retirement? Conventional wisdom says
that you will need as much as 70% to 80% of your pre-retirement income,
adjusted each year for inflation, to continue your current life style.
Other Factors that will determine how well you will manage
your retirement savings include:
(1)
The total Amount of Contributions that you will
make over time
(2)
Your method of saving. (All at once or little by
little?)
(3)
What type of Investment you will use in
Retirement i.e. Savings Accounts, Stocks, Bonds, etc.
(4)
The Inflation Rate over the Life of your
Retirement Planning
(5)
How Long will you have before you spend down
your Retirement Savings
(6)
Whether or Not you Re-Invest the Growth of your
Investment?
(7)
How much will your savings or investments grow,
less expenses
(8)
How and when Money will be taxed and by how much
Join the Lifetime Financial Group for a Seminar to learn more
about your Social Security Benefits. Click here to sign up.
© Carmen Coleman, President and CEO
Lifetime Financial Group, LLC
30 W. Broad Street, Suite 300
30 W. Broad Street, Suite 300
Rochester, NY 14614
(585)325-2525
Email: lifetimefinancial@ssnrep.com
