BlueSky Wealth Advisor, Stephen Fletcher, CFP® Professional, MBA is located in our New Bern office.
When I first began my career, I got a very helpful piece of advice from my first boss; he was a perfectionist and reviewed even the most minute detail of the work I turned in to him. He told me that, as good as someone is at their job, you must assume at the outset of your experience with them that they are terrible at it. You should always double and triple check their work, make sure they are a trusted source, and then only rely on their information and knowledge once it is repeatedly proven to be correct. The Social Security Administration, unfortunately, seems to be an organization that cannot be trusted to do their job properly.
The Office of the Inspector General recently underwent an audit of the benefits the Social Security Administration is paying out. The findings? 82% of widow(er)s are being underpaid.
The maximization of Social Security can be an important catalyst in someone’s plan. It is a benefit earned through a lifetime of working hard and paying taxes into the system. It is vital that retirees and their families confirm the benefits available to them and make sure that their financial future is being looked after. Simply going into a Social Security office and asking for your money is not the way to make sure you are being properly provided for. Below are some steps that could help make sure you or a loved one doesn’t fall in the 82% that get underpaid.
1-Know your game plan prior to going into the Social Security office.
Do your research. Which benefits are you or a loved one eligible for? Which benefit should be claimed now, and which should be allowed to maximize at the tune of an 8% increase per year? In many cases, it’s helpful to have these decision points written down so that you can communicate them effectively.
2-Ask questions to make sure you and the Social Security employee are on the same page.
There are so many stories of clients and other retirees who enter a Social Security office, knowing which benefit they want to claim, and when they want to switch over to their other benefit. Unfortunately, in many cases, the person attempting to claim benefits and the SSA employee assisting them aren’t on the same page, and the wrong benefit is activated; if not caught prior to the checks beginning, the retiree is stuck taking a lesser amount than they could have claimed.
3-If you don’t know, make sure you talk to someone that does.
What you don’t know CAN hurt you, or a loved one. Not knowing whether the retiree’s benefit or spousal benefit should be claimed can result in a Social Security payout that, over the rest of one’s lifetime, is hundreds of thousands of dollars below where it could have been. If you don’t know what questions to ask, or how to ensure that the benefits are being maximized, reach out to a planner who can walk you through some simple steps to make sure you can be confident you are being paid the amount you have earned.
Here at BlueSky, every client receives a Social Security optimization strategy, taking into account the rest of their financial goals and assets. In some instances where the income from Social Security is not as important, the “Hold Harmless” provision in Social Security that keeps Medicare costs low is the strategy we use to keep a lid on their expenses. When a client needs to get every dollar possible out of Social Security, we create a customized strategy with specific instructions for claiming, so that the client and the Social Security office they work with know exactly what needs to happen in order to best protect the client’s financial future.
Social Security checks are not always very large, but they can provide an all-important baseline, and the permanence of the payments is in many situations critical. They can absolutely make or break a hard-working individual’s retirement plan, so make sure you’re getting all that you deserve out of the system.