Over the last few years, financial advisors have begun to recognize the importance of
But there is still a major lack of understanding on the workings of the program, says
For example, he notes that most advisors know about the important “file and suspend” feature, which allows a higher-earning spouse who wants to maximize the lifetime benefits for him/herself and a spouse is able to file for benefits at age 66 and then suspend receiving them until age 70. This allows a spouse of 66 to collect half the benefits available at filing, until the spouse also reaches 70 and is then able to collect the maximum on her/his own account.
But few know that even after age 70, there can be an advantage to continuing to work.
While the boost in benefits a person gets for waiting tops out at 70, if a client continues to earn a significant income into his or her 70s, while collecting a
Williams says advisors need to be fully conversant about
In view of such numbers, Williams says that advisors “should really treat
The need for advisors to become knowledgeable about Social Security’s many features (and pitfalls–like the one-year time limit on paying back a mistaken decision to claim benefits too early) is particularly important because ignorance about
SURPRISING REASONS FOR COMMON MISTAKES
Williams notes that nearly half of Americans start collecting their
Of course, many people start collecting at 62 simply because they have to. Either they’ve lost a job or had to quit because it became too hard, and they need the money. Others may be seriously ill and afraid they won’t live much longer. But Williams says many others are retiring early simply because they don’t have good advice.
“We conducted a survey of 1,000 people recently and we discovered that 61% of people didn’t discuss
Compounding this scarcity of sound advice is the fact that 50% of people don’t know much, or anything, about spousal benefits. That is, a spouse can receive half of a retiree’s check on top of the check that the retiree receives, and that a widow receives the higher of her/his own
The survey also found that only 25% of people queried said they had turned to an advisor for help in strategizing on
In an age when up to 50% of first marriages end in divorce in America and when multiple divorces are not uncommon, Williams says it’s also remarkable how few people know that an ex who was married for more than 10 years, and who has not remarried, is entitled to collect a benefit of up to half of a former spouse’s
Williams recalls that a few years ago, he attended a conference and saw that someone was offering a session on
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