An important part of helping clients achieve their financial goals is helping them navigate questions and decisions around Social Security and Medicare. Whether it’s deciding when to start Social Security or applying for supplemental Medicare coverage, these decisions have a big impact on your financial situation and wellbeing.
This book is broken up into two parts, as Social Security and Medicare are complex topics. The first covers Social Security and strategies. The second part covers the ins and outs of Medicare and all its various plans.
We hope you discover strategies and new things that will help you make the best decisions for your situation. As always, we’re here to help and answer any questions you may have.
Visiting the Social Security Administration (SSA) office likely does not rank high on a list of enjoyable activities. The inconvenience, long waiting times, frustration with trying to implement a filing strategy, and difficulty in filing for first-time benefits are all reasons it’s usually not a positive experience. We’ve found that no matter how much analysis and thought we put into helping you find the most appropriate Social Security strategy for your household, we can’t control your experience when you visit the SSA office to implement those recommendations.
To eliminate many of these headaches, you can use a filing service provided through Social Security Advisors. Instead of visiting the SSA office, a specialist can walk you through the online social security application while you’re sitting at home. All you need is a phone, a computer with Internet access, and 30 to 45 minutes of time.
What to expect
You can schedule a meeting on your own and pay the $100 filing service fee on the Social Security Advisors website, or do it during a review meeting with your Merriman advisor.
Social Security Advisors then sends a confirmation email that includes a GoToMeeting invitation. GoToMeeting, similar to WebEx and other online virtual professional meeting services, allows the specialist to share their screen while working through the Social Security application with you. When you click the invitation, you’ll be prompted to download the GoToMeeting software. You can dial in for audio, or use your computer’s speakers and microphone.
Once the specialist submits the application, they’ll email you a copy for your records.
As an extra bonus, if the Social Security Administration misunderstands the application or an error is made, Social Security Advisors continues to provide support until the issue is fixed.
What are the limitations of this service?
The online application does not work for clients filing for Social Security death benefits and dependent benefits. Dependent benefits come about when a parent who has dependent minor children passes away. These children and the surviving spouse are then eligible to claim a portion of the deceased’s Social Security benefits. For both of these cases, the applicant still needs to visit the SSA office.
Who is Social Security Advisors?
Social Security Advisors has been in business for seven years, helping clients maximize their Social Security benefits and implement various strategies.
Merriman does not have a relationship with Social Security Advisors and doesn’t provide guarantees of their services, but we’ve found that their services do help improve clients’ experiences with the SSA.
There are countless articles online on strategies for maximizing your Social Security benefits. Married couples have far more options than singles, and the rules are complex. If you are married and eligible (or almost eligible) for Social Security, it is worth talking to a financial or tax professional to ensure you weigh all of your options. In the meantime, this article from Kiplinger provides a nice primer on two of those available strategies: File and Suspend and Restricting an Application. It’s worth a quick read so you can come prepared to speak intelligently with your advisor, and thereby maximize your probability of a successful outcome.
The news media conditions us to think about our retirement savings need as a fixed number. At a recent graduation party someone told me they had $1.5MM saved for retirement,” and then came the big question: “Do you think that’s enough?” As a financial planner, this question has always perplexed me. With only that snippet of information, how in the world am I to know how much this person needs in retirement? The key is to know your “number” in the context of your goal-centric plan — not in terms of your demographic, neighbor or brother. So, let’s look at some factors that will affect your “number.”
1) Your cost of living. This is first for a reason. If you don’t have this figured out, take the time to work on it. There are numerous online tools to help you with it. The tool I often recommend to clients is Mint.com. The point here is simple: If you are going to spend $200,000/year in retirement, your nest egg needs to be much bigger than if you are going to spend $100,000/year.
2) Social Security. Just having this income stream will a lesser burden on your nest egg. The question is: How much less? The maximum figure you can expect to receive in today’s dollars is around $30,000 per year. Get a personalized estimate here. You can begin taking this benefit as early as age 62, or as late as 70, depending on your unique set of circumstances.
3) Other private and public pensions. Just like Social Security, these income sources will reduce the withdrawal burden or allow you to achieve a successful retirement period on a smaller nest egg. Pensions typically afford more flexibility than Social Security. One example is the single or joint life benefit option (read more on this from my colleague, Jeremy Burger, here). Another option is to take a lump sum. Your decisions on these options will have important implications for your retirement plan.
4) Distribution rate and portfolio allocation. 4% of your portfolio is generally considered to be a sustainable withdrawal rate. But what is your portfolio made of? A 60% equity, 40% bond allocation? How about 100% equity? Beyond that, how should you allocate the respective equity and bond components? These are important questions that you need to answer. Your advisor can help. One thing is for sure: With increasing longevity, you are going to need some long-term growth in the portfolio. And, since you will be distributing, you must shield your portfolio from the short-term volatility of the equity markets. The key is to find the perfect balance.
Having worked with hundreds of clients over the past several years, I can tell you that this is just the tip of the iceberg. Few people have the tools or know-how to coordinate all of this effectively, and one simple fact stated in the middle of a party is clearly not enough information to solve it all. If you’re not sure what your “number” is, be sure to ask an advisor for help.
One of the many areas in which I help my clients is planning for retirement. Many people want to have a good understanding of how much they can spend, what type of investment return they need, and of how these decisions affect their portfolio.
A major source of income for most investors is Social Security. Every retiree has a choice of when to begin taking Social Security payments. While some people ignore this in their planning or take the decision lightly, this choice can make a big difference. (more…)
Get the latest blog posts delivered directly to your inbox