Helping clients make crucial Social Security decisions

August 19, 2019 by Alex Noonan

Helping clients make Social Security decisions blog cover image

about the author:

Alex Noonan

Technical writer

Joining Advicent as a partner support specialist in 2013, Alex provided high-quality support for partners within NaviPlan and Profiles. In 2015, he took that product knowledge to the learning development team as a technical writer, creating detailed documentation for partners with a practical focus on what they need to know. Alex received a BSBA from Drake University in Marketing/Advertising Creative in 2013.

When advising on high-level topics like retirement saving, specific elements like maintaining a proper Social Security strategy in place can get overlooked by clients. Though advisors will often input the ideal Social Security outcome into a client’s plan, decisions made by the client may alter how accurate those projections wind up. A recent study from United Income found that retirees leave a collective $3.4 trillion on the table in Social Security benefits by withdrawing too early, which comes to a nine percent loss of income per retiree.

While many clients may say that they are willing to wait until their benefits fully vest, it does not always turn out that way. Ensuring clients make the correct move when it comes to Social Security may be the difference between retirement disaster or success.

Educating clients on Social Security

The foundational way to help clients with Social Security is education. Educated decisions through advisor guidance can ensure clients start taking their Social Security at the right time and understand the penalties associated if they do not. Advisors should consider providing clients with a multitude of strategies to show how their retirement will be impacted based on when they begin claiming their benefits. This is also an excellent opportunity to show how different retirement account strategies could be applied to show retirement success while delaying Social Security income.

In married or familial scenarios, advisors can also show the benefits of using spousal and dependent tactics for Social Security. Claiming spousal benefits can give a client up to 50 percent of their spouse’s benefits and some married couples will opt to maximize the highest-earning spouse's benefit by delaying benefit collection until age 70. Dependent children can also qualify for benefits of a deceased or living parent. Up until age 19, a dependent child can receive up to 75 percent of a deceased parent’s benefits or up to half of a living parent’s benefits. These unique scenarios should be considered when Social Security is a major part of retirement planning.

Social Security planning with NaviPlan

Social Security strategies in NaviPlan allow for all these considerations to be modeled side-by-side in various alternative plans. Supporting three different benefit planning models that allow for customized start dates, NaviPlan ensures that your client can clearly see accurate Social Security numbers all on one convenient page. Additionally, with the amount of future Social Security benefits that younger clients will see now in question, modeling various benefit amounts can show how each scenario will play out. With NaviPlan, clients do not have to struggle to understand why Social Security income is important to their financial health and can get a more clear picture of why delaying income may be crucial.

NaviPlan also supports collaborative planning with its client portal and gives clients the ability to adjust their Social Security benefits on their own. Dynamic graphs and charts instantly show the difference that various Social Security withdrawal ages can make, in addition to various other retirement variables. The client portal gives do-it-yourself type clients the ability to learn about their retirement health at their own pace and helps them come into advisor meetings with a more knowledgeable understanding.

Social Security is an important part of retirement planning that may seem reasonable to most, but when it comes down to practice, many might not be prepared to hold off receiving it. Strong advisor suggestion and guidance, powered with NaviPlan’s powerful calculation and client reporting, helps clients better understand why having self-control with their Social Security can create major changes in their retirement health.

To learn more about how NaviPlan can fit your firm’s Social Security planning strategy, click here >

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