Ask about Social Security

Jim Steffen |

On March 19th we hosted one of our regular lunch and learn events. The topic was Social Security. It usually draws a good crowd relative to others, but even I was surprised by how many people attended. The room was full with roughly 50 attendees. 

Especially in years past, I’d regularly be surprised when a client would inform us they had elected to start drawing Social Security without ever bringing it up for discussion. I frequently saw people leaving money on the table because they simply didn’t know about the various claiming strategies or how to assess the decision. Being in the business of providing financial advice, I found it puzzling that our own clients would make the decision without ever consulting with us. 

To up my game, I immersed myself in the details of Social Security and began to proactively bring the subject up. Go figure, in late 2015, just as I had really become an expert on the core claiming strategies, Congress decided to change the rules. The effect was two strategies, known as “file and suspend” and “restricted application for spousal benefits,” were to be phased out.  

The good news is there are still people who are eligible to take advantage of at least one of these strategies. The cut-off is for those born before January 1, 1954. 

If you were born after 1/1/1954, don’t feel terrible. It’s true you won’t have quite as much flexibility as previous generations, but there are still plenty of decisions to make. For married couples, the key decision usually rests with when to file (at what age). There is a break-even calculation and other considerations such as survivor benefits. Often time it makes sense for the spouse with the higher earnings history to defer as long as possible. But there are important nuances to every situation including health history and age differences between spouses. It get’s even more complicated for those who are divorced or have been widowed. 

The point is, if you have questions or are thinking about applying for Social Security benefits, we really encourage you to bring it up if we’ve haven’t discussed it already. It’s such a key decision for retirees and shouldn’t be made haphazardly. Unfortunately, it can be complicated because of the various rules and subtleties to each situation. In-fact, I have multiple written resources that I reference regularly. They range from 22-41 pages of detailed single-spaced print.  

Because it’s such an important topic, we’ll surely host more Social Security learning events in the future. If you have any questions in the mean-time, please don’t be shy to ask. I’ve personally made an effort to be an expert in this area.  

Trott Brook Financial is a registered investment adviser.  Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies.  Investments involve risk and, unless otherwise stated, are not guaranteed.