How to become a Social Security expert
Training programs available for various levels of experience and interest.
How can I become a Social Security expert? That is one of the most common questions I receive from InvestmentNews readers. And if you think you are too late to hop on the Social Security bandwagon in light of the scheduled elimination of two key Social Security claiming strategies, you couldn’t be more wrong.
Helping clients determine the best time to claim Social Security benefits to suit their personal situation will continue to be a key element of a solid retirement income plan. And given the current confusion over claiming options, it’s a perfect time to brush up on key Social Security rules so you can answer your clients’ and prospective clients’ questions.
The ability to file and suspend benefits at age 66 ended on April 29. Those who filed and suspended their benefits before the deadline are grandfathered under the old rules that allow a worker to trigger benefits for an eligible family member, such as a spouse or minor dependent child, while his or her own retirement benefit continues to grow by 8% per year up until age 70.
Those who filed and suspended their benefits by April 29 also retain the right to request a lump sum payout of all suspended benefits instead of collecting the delayed retirement bonus — a desirable option for unmarried clients.
Under the new rules, workers can still elect to suspend their benefits at full retirement age or later in order to earn delayed retirement credits, but no one will be able to collect benefits during the suspension period and the lump sum pay out option will disappear.
But a very powerful claiming strategy remains for married couples and eligible divorced spouses that will allow one spouse to claim only spousal benefits — worth 50% of the worker’s benefit amount — at full retirement age and switch to their own maximum retirement benefit at 70. In the case of divorced spouses who were married at least 10 years, each person can claim spousal benefits on the other’s earnings record.
However, only people who were 62 or older by Jan. 1, 2016, will be able to file a restricted application for spousal benefits when they turn 66. Younger workers will never be able to use this valuable claiming option. Still, that leaves nearly eight years for clients to use this strategy as the last wave of eligible claimants will turn 66 on Jan. 1, 2020, and they will be able to claim spousal benefits for four years before claiming their own maximum retirement benefits at 70.
Determining the best time to claim Social Security benefits will remain an important decision even for those clients who are not able to take advantage of these creative claiming strategies. Health, family history of longevity, access to other guaranteed forms of income such as pensions and annuities, required minimum distributions, tax consequences and retirement income needs are all important considerations when deciding on the best time to claim Social Security benefits.
FROM TEACHER TO STUDENT
Last week, I transitioned from teacher to student. I started the week by presenting a seminar on “How to Maximize Social Security Benefits Now” at the InvestmentNews Retirement Income Summit in Chicago. I think it is one of the best events on the financial industry’s conference circuit.
Later that week I attended the two-day school presented by Social Security Timing, a software and training program. I was given a complimentary press pass to attend the session. Bottom line: I was very impressed with the detailed explanations of various Social Security benefits for workers, dependents, spouses and survivors as well as the integration of Social Security claiming decisions with retirement income planning, taxation, estate planning and IRA distributions.
The Social Security Timing School is not for novices. It involves a serious commitment of time and money — about $1,800 plus travel costs. Early-bird discounts are available for the next session in Reno, Nev., in October.
But if you are new to Social Security planning, I suggest you get your feet wet first by enrolling in a basic knowledge course offered by Horsesmouth.com which is offering deeply discounted access to its excellent Savvy Social Security planning program for financial advisers, CPAs and tax attorneys.
Another option is in-person or online training through the National Social Security Association.
Several top-notch Social Security software programs, such as Social Security Solutions and Social Security Pro, also offer webinar training and telephone support.
Or, if you don’t have the time or interest to wade into the weeds of regulations and rules, you can hire SocialSecurityAdvisors.com to act as a third-party expert to help your clients decide on a claiming strategy and assist them in completing their online applications for benefits.
(Questions about Social Security? Find the answers in my e-book: Maximizing Social Security Retirement Benefits.)
Mary Beth Franklin is a contributing editor to InvestmentNews and a certified financial planner.
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