"How can I maximize my Social Security benefits?"
That is a key question most 55- to 65-year-olds are asking today, and it is presenting a major opportunity for advisors to counsel them and start up a new business relationship.
The reason for this opportunity is that most people approaching — or already in — their early 60s don't know where to turn for individualized help, and perhaps by default they start claiming Social Security benefits as soon as they become eligible. In fact, most people begin taking benefits at the minimum eligibility age of 62. But this decision, while right for some, can end up costing most people tens of thousands of dollars in the long run.
Dollars and sense
If someone takes Social Security at age 62, they are only getting 75 cents on the dollar. At the "full retirement age" of 66, people are getting that full dollar, but for those that can wait until age 70 to begin claiming Social Security, they receive $1.32 on the dollar.
Here's another way to look at it. At age 62, a client can receive a maximum monthly Social Security benefit of $1,855. If he or she delays receiving Social Security benefits until age 70, that maximum monthly benefit jumps to $3,266 per month. Instead of $22,260 per year, the client would receive $39,192 per year. That can make a big impact on a retiree's lifestyle.
Now certainly, waiting until age 70 isn't the right choice for many people. But the important thing to remember here is that the average person — married, single, divorced, etc. — more often than not doesn't know the optimal time to begin claiming benefits.
"We need to get to people age 55 to 60 to educate them about Social Security planning. By age 62 it's too late," says Charles Osmond of Western & Southern Financial Group, who spoke on the subject during a breakout session on retirement income and benefit planning at the recent NAILBA 32 conference in Dallas.
Many advisors are getting to these people, and it's been a huge win-win for everybody.
"Social Security workshops have been the driving force of our business over the last year and the results have been tremendous," says Suzanne M. Buska, president of Buska Retirement Solutions, Inc. in Rothschild, Wis. "We have brought in several million in premium just from the Social Security workshops. This is a great way to corner the market on income planning."
Buska says you don't have to be the first firm to offer Social Security planning in your area —you just have to be the best at it. "A few of our competitors tried it before us and they all stopped doing it," Buska says. "We have taken a lot of time to perfect our process to make sure we do it better than any of our competition."
Buska's eldest son, Cole J. Bruner, the company's vice president, does the speaking at all of their Social Security workshops after extensive studying to become an expert on the subject. "He spent about six months reading about all the different benefit strategies available. You definitely need to know what you are talking about because the people that have been coming to see us after the workshop are really relying on our recommendations when choosing their benefit strategy," Buska says.
Investment Advisor Representative Cristina Acosta of Money Wise in Scottsdale, Ariz., says offering classes specifically on the topic of Social Security planning has made a big impact on the practice she co-owns with Nancy Fromm. Prior to getting into this niche, the two of them found themselves sitting down with clients and asking questions on the best way to take Social Security benefits. They wanted to help, but knew it would take some effort.
